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22 December 2011
Former Army National Guard Major Sentenced to 60 Months in Prison for Receiving Bribes at Bagram Airfield, AfghanistanRead the Press Release
WASHINGTON – A former Major in the U.S. Army National Guard who was deployed to Bagram Airfield, Afghanistan, was sentenced to 60 months in prison for receiving bribes from military contractors in exchange for fraudulently verifying the receipt of concrete bunkers and barriers that were never received, Assistant Attorney General Lanny A. Breuer of the Criminal Division announced today.
Christopher P. West, of Chicago, was sentenced on Dec. 20, 2011, by U.S. District Judge Matthew F. Kennelly of the Northern District of Illinois in Chicago. In addition to his prison term, West was sentenced to two years of supervised release and was ordered to pay $500,000 in restitution to the United States Department of Defense.
West pleaded guilty in June 2009 to a superseding indictment charging him with eight counts of bribery, conspiracy and fraud. According to court documents, West was deployed to Bagram Airfield from March 2004 until March 2005. West and Lieutenant Robert Moore had sole responsibility over ordering, receiving and verifying the receipt of bunkers and barriers at Bagram, which, at the time, served as the central receiving point for all bunkers and barriers in Afghanistan. West and Moore conspired with the bunker and barrier contractors at Bagram to fraudulently inflate the number of bunkers and barriers delivered to Bagram, and to profit in the resulting overpayments made by DOD.
According to court documents, the contractors fraudulently billed the DOD for bunkers and barriers never delivered to Bagram. West and Moore fraudulently verified on material inspection and receiving reports that the contractors had delivered the inflated number of bunkers and barriers. As a result, the contractors were able to receive payment for the falsely inflated number of bunkers and barriers. Upon receiving payment, the contractors paid West and Moore a portion of the money received.
In addition, according to the superseding indictment and other documents filed in this case, West, Moore and co-conspirator Sergeant Patrick Boyd awarded contracts to three different contractors in return for $30,000 each, which the conspirators split among themselves.
West is the eighth defendant sentenced in this investigation. Ten additional defendants remain to be sentenced, some in the Northern District of Illinois and others in the District of Hawaii.
West’s co-conspirators, Robert Moore and Patrick Boyd, were sentenced to 15 months and 40 months in prison, respectively, for their roles in this criminal activity. Sergeant Sheryl Ayeni was also sentenced recently to one year in prison for the receipt of $30,000 in return for her official acts as a vendor pay agent at Bagram during 2004 and 2005. Also arising from this investigation, John Mihalczo was sentenced to 15 months in prison for accepting approximately $115,000 in bribes at Bagram between 2003 and 2004.
This case is being prosecuted by Trial Attorney Mark W. Pletcher of the Criminal Division’s Fraud Section , and investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service and the Department of the Air Force, Office of Special Investigations, with assistance from the Special Inspector General for Afghanistan Reconstruction.
21 December 2011
Two Las Vegas Men Sentenced to 20 and 25 Years in Prison for <br /> Cocaine Distribution and Money Laundering ConspiracyRead the Press Release
WASHINGTON – Two Las Vegas men were sentenced yesterday in the District of Nevada to 20 and 25 years in prison for their roles in an international cocaine distribution and money laundering conspiracy, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada announced today.
U.S. District Judge Gloria M. Navarro sentenced Jose Lopez-Buelna, aka “Miguel,” 51, to 20 years in prison, and Erik Dushawn Webster, 47, to 25 years in prison. Lopez-Buelna and Webster were also sentenced to five years of supervised release.
Lopez-Buelna pleaded guilty on Feb. 16, 2011, to conspiracy to distribute five kilograms or more of cocaine, conspiracy to launder money and two counts of money laundering. Webster was convicted by a federal jury on Feb. 18, 2011, of conspiracy to distribute five kilograms or more of cocaine and conspiracy to launder money.
At the sentencing hearings, the court found that the drug distribution conspiracy in this case involved 150 kilograms or more of cocaine.
According to court documents and trial testimony, from 2007 through October 2009, Lopez-Buelna and co-defendant Jesus Gastelum recruited various individuals, including Webster and others, to drive motor homes outfitted with sophisticated, lead-lined, hidden compartments throughout the United States, Mexico and Canada. The hidden compartments were used to store large amounts of cocaine and drug proceeds. Lopez-Buelna and Gastelum ordered the motor home drivers to make stops at various destinations, including Atlanta, Chicago, New York and Montreal, where the cocaine was unloaded and bulk cash was loaded into the hidden compartments. The motor home drivers then transported these proceeds from the cocaine distribution back to Mexico. Testimony at trial also indicated that Webster recruited additional motor home drivers to drive a motor home registered in his name across the U.S./Mexico border and back to various destinations in the United States.
Gastelum was charged with conspiracy to distribute five kilograms or more of cocaine, conspiracy to launder money, money laundering and other charges. He remains a fugitive in this case.
Another co-defendant charged in the conspiracy, Adolph Vargas, aka “Adolph Vargas Ibarra,” aka “Al,” pleaded guilty in January 2011 to conspiracy to distribute five kilograms or more of cocaine and one count of money laundering. Vargas was sentenced in November 2011 to 97 months in prison followed by two years of supervised release.
On July 22, 2011, the court entered a final forfeiture order in the case against all of the defendants. The forfeiture order included two recreational vehicles, two .38 caliber semi-automatic pistols, various vehicles and more than $4 million, all of which represented drug proceeds that law enforcement recovered during the course of the investigation of this case.
The case was investigated by the FBI, the Drug Enforcement Administration, the Las Vegas Metropolitan Police Department and the Internal Revenue Service - Criminal Investigation.
The case was prosecuted by Trial Attorneys Marty Woelfle and Margaret Honrath of the Criminal Division’s Organized Crime and Gang Section, with substantial assistance from the U.S. Attorney’s Office for the District of Nevada.
North Carolina Businessman Guilty of Failing to Pay More Than $15 Million in Payroll Taxes for Temporary Staffing CompaniesRead the Press Release
WASHINGTON - Bruce Gregory Harrison III was convicted yesterday following a jury trial in federal court in Winston-Salem, N.C., announced the Department of Justice. Harrison had been charged in a 63-count indictment with large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial proved that Harrison failed to pay over more than $15 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.
“Mr. Harrison not only defrauded his own employees, but he defrauded the American people as well,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina. “This sort of conduct is intolerable, especially during these difficult economic times, and we will do everything we can to make sure it is punished accordingly.”
“Honest, hard-working taxpayers count on their payroll deductions for Social Security and Medicare being paid over to fund their retirement and health care needs,” said John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division. “They should rest assured that those who would steal those funds will be prosecuted to the fullest extent of the law.”
“The IRS-Criminal Investigation Division takes these violations of law very seriously. Payroll tax fraud results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees,” said Victor S.O. Song, Chief of the Internal Revenue Service (IRS) – Criminal Investigation.
According to the trial evidence and other documents filed in the case, Harrison, a resident of Greensboro, N.C., did business under various corporate names including U.S.A. Staffing and Compensation Management Inc. He owned or controlled temporary staffing companies operating in at least nine states. Harrison’s staffing companies were headquartered in Guilford County, N.C., and contracted with client businesses to provide temporary workers. Harrison’s companies promised to assume full responsibility for the payment of wages and the withholding and transmitting of taxes to the IRS for those employees. Instead, Harrison failed to account for and pay over in excess of $15 million in federal payroll taxes for the employees of those companies. The evidence at trial showed that Harrison caused false bank statements to be presented to auditors to conceal the nonpayment of the payroll taxes.
Harrison was also convicted of corruptly endeavoring to obstruct the IRS by means of false statements to IRS revenue officers. Evidence established he had used company funds to purchase personal residences, to buy a yacht and to finance commercial motion pictures, including National Lampoon’s Pucked and Home of the Giants. Harrison was also convicted of failing to timely file his own income tax returns for 2004, 2005 and 2006. Following the jury verdict, Chief Judge James A. Beaty Jr. ordered Harrison detained. Sentencing is scheduled for April 6, 2012, at 9:30 a.m. in Winston-Salem.
U.S. Attorney Rand and Principal Deputy Assistant Attorney General DiCicco commended Assistant U.S. Attorneys Frank Chut and Terri-Lei O’Malley and Tax Division Trial Attorney Jeffrey McLellan, and the IRS Agents who assisted them, in successfully prosecuting the case.
Justice Department Settles Lawsuit with Commonwealth of Massachusetts and City of Brockton, Mass., to Enforce Employment Rights of U.S. Army ReservistRead the Press Release
WASHINGTON - The Justice Department announced today that the city of Brockton, Mass., promoted U.S. Army Reservist Brian Benvie on Dec. 16, 2011, to the position of lieutenant in the city’s police department, and that the commonwealth of Massachusetts has afforded him retroactive seniority and $32,356.84 of backpay in that position. The promotion and other related relief satisfy the terms of a settlement agreement entered after the Department of Justice filed a complaint in U.S. District Court for the District of Massachusetts on Dec. 16, 2010. The complaint alleged that the entities violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) when they refused to permit Benvie to take the October 2008 lieutenants’ promotional exam, thereby denying him proper reemployment with the seniority, status and benefits he would have enjoyed but for his military service.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in a position of like seniority, status and pay.
The department’s complaint alleged that the city and the commonwealth violated 38 U.S.C. §§ 4312-13, among other ways, by: failing to recognize and give full effect to Benvie’s retroactive promotion date to sergeant – the date he would have been promoted to sergeant but for his military service. The complaint also alleged that this failure to fully recognize Benvie’s retroactive promotion date to the sergeant position subsequently led the defendants to refuse to permit Benvie the opportunity to take the October 2008 lieutenants’ promotional exam, thereby continuing to deny Benvie proper reemployment with the seniority, status and benefits he would have enjoyed but for his military service.
“The men and women who bravely serve our nation in the armed forces should not have to sacrifice their civilian career opportunities to do so. Employers have a legal obligation to ensure returning service members are placed back into the appropriate position and status, when they return from military duty, as required by law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Civil Rights Division is committed to protecting the rights of those who, through their courage and sacrifice, secure the rights of all Americans.”
“Our service members must be able to serve their nation and its citizens with the confidence that they will not face discrimination in employment when they return,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “The United States Attorney’s Office remains committed to protecting the rights of the many brave soldiers in the Commonwealth of Massachusetts.”
The case was litigated by Assistant U.S. Attorneys Sonya Rao and Jennifer Serafyn in the U.S. Attorney’s Office for the District of Massachusetts, in collaboration with the Employment Litigation Section of the Civil Rights Division of the Justice Department. The case stems from a referral from the U.S. Labor Department following an investigation by its Veterans’ Employment and Training Service.
The Justice Department’s Civil Rights Division and the U.S. Attorney’s Offices have given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.justice.gov/crt/emp and www.servicemembers.gov , as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm .
Justice Department Requires Divestiture in $7.9 Billion Merger of Exelon Corporation and Constellation Energy GroupRead the Press Release
WASHINGTON — The Department of Justice announced that it will require Exelon Corporation and Constellation Energy Group Inc. to divest three electricity generating plants in Maryland in order to proceed with their $7.9 billion merger. The department said that the transaction, as originally proposed, would substantially lessen competition for wholesale electricity, ultimately increasing electricity prices for millions of consumers in the mid-Atlantic region.
The department’s Antitrust Division filed a civil lawsuit today in U.S. District Court in Washington, D.C., to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns and the lawsuit.
“Competition in wholesale electricity markets is vital to the economic well-being of consumers and businesses,” said Sharis A. Pozen, Acting Assistant Attorney General for the Antitrust Division. “These divestitures will preserve that critical competition for the benefit of electricity customers throughout the mid-Atlantic.”
According to the complaint, the merger would create one of the largest electricity companies in the United States with total assets of $72 billion and annual revenues of $33 billion, and would combine the assets of two large competitors in the mid-Atlantic region. Together, the companies would own between 22 and 28 percent of the generating capacity in the densely populated mid-Atlantic area encompassing Delaware, the District of Columbia, New Jersey, eastern Pennsylvania, and parts of Maryland and Virginia. The department said that the combination of the assets would enhance the incentive and ability of the merged firm to raise wholesale electricity prices and reduce output.
Under the terms of the proposed settlement, the merged firm must divest three electricity plants, which in total provide more than 2,600 megawatts of generating capacity. The plants to be divested are Brandon Shores and H.A. Wagner in Anne Arundel County, Md., and C.P. Crane in Baltimore County, Md.
Exelon is incorporated in Pennsylvania and has its headquarters in Chicago. Exelon owns the PECO utility of Philadelphia and the Commonwealth Edison utility of Chicago. Exelon had $18.6 billion of revenues in 2010.
Constellation is incorporated in Maryland and has its headquarters in Baltimore. Constellation owns the BG&E utility of Baltimore. Constellation had $14.3 billion of revenues in 2010.
As required by the Tunney Act, the proposed settlement and the department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to William H. Stallings, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 8000, Washington, D.C. 20530, 202-514-9323. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Justice Department Reaches $335 Million Settlement to Resolve Allegations of Lending Discrimination by Countrywide Financial CorporationRead the Press Release
The Department of Justice today filed its largest residential fair lending settlement in history to resolve allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008.
The settlement provides $335 million in compensation for victims of Countrywide’s discrimination during a period when Countrywide originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders.
The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Central District of California in conjunction with the department’s complaint which alleges that Countrywide discriminated by charging more than 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending. The complaint alleges that these borrowers were charged higher fees and interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.
The United States also alleges that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were discriminated against were qualified for Countrywide mortgage loans according to Countrywide’s own underwriting criteria.
“The department’s action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for lending discrimination,” said Attorney General Eric Holder. “These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin. With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”
The settlement resolves the United States’ pricing and steering claims against Countrywide for its discrimination against African Americans and Hispanics.
The United States’ complaint alleges that African-American and Hispanic borrowers paid more than non-Hispanic white borrowers, not based on borrower risk, but because of their race or national origin. Countrywide’s business practice allowed its loan officers and mortgage brokers to vary a loan’s interest rate and other fees from the price it set based on the borrower’s objective credit-related factors . This subjective and unguided pricing discretion resulted in African American and Hispanic borrowers paying more. The complaint further alleges that Countrywide was aware the fees and interest rates it was charging discriminated against African-American and Hispanic borrowers, but failed to impose meaningful limits or guidelines to stop it.
“Countrywide’s actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “We are using every tool in our law enforcement arsenal, including some that were dormant for years, to go after institutions of all sizes that discriminated against families solely because of their race or national origin.”
The United States’ complaint also alleges that, as a result of Countrywide’s policies and practices, qualified African-American and Hispanic borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans. The discriminatory placement of borrowers in subprime loans, also known as “steering,” occurred because it was Countrywide’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan . In addition, Countrywide gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Countrywide’s employees had discretion to grant these exceptions.
This is the first time that the Justice Department has alleged and obtained relief for borrowers who were steered into loans based on race or national origin, a practice that systematically placed borrowers of color into subprime mortgage loan products while placing non-Hispanic white borrowers with similar creditworthiness in prime loans. By steering borrowers into subprime loans from 2004 to 2007, the complaint alleges, Countrywide harmed those qualified African-American and Hispanic borrowers. Subprime loans generally carried higher-cost terms, such as prepayment penalties and exploding adjustable interest rates that increased suddenly after two or three years, making the payments unaffordable and leaving the borrowers at a much higher risk of foreclosure.
The settlement also resolves the department’s claim that Countrywide violated the Equal Credit Opportunity Act by discriminating on the basis of marital status against non-applicant spouses of borrowers by encouraging them to sign away their home ownership rights . The law allows married individuals to apply for credit either in their own name or jointly with their spouse, even when the property is owned by both spouses. For applications made by married individuals applying solely in their own name between 2004 and 2008, Countrywide encouraged non-applicant spouses to sign quitclaim deeds or other documents transferring their legal rights and interests in jointly-held property to the borrowing spouse. Non-applicant spouses who execute a quitclaim deed risk substantial uncertainty and financial loss by losing all their rights and interests in the property securing the loan.
In addition, the settlement requires Countrywide to implement policies and practices to prevent discrimination if it returns to the lending business during the next four years. Countrywide currently operates as a subsidiary of Bank of America but does not originate new loans.
The department’s investigation into Countrywide’s lending practices began after referrals by the Board of Governors of the Federal Reserve and the Office of Thrift Supervision to the Justice Department’s Civil Rights Division in 2007 and 2008 for potential patterns or practices of discrimination by Countrywide.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). President Obama established the interagency FFETF to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .
A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.
Florida-Based Defense Contractor Pays US $4.75 Million to Resolve Allegations Related to Defective Bomb FuzesRead the Press Release
WASHINGTON - Kaman Precision Products Inc., an Orlando, Fla., defense contractor, will pay the United States $4.75 million to resolve allegations that the company submitted false claims for non-conforming fuzes sold to the U.S. Army for use in “bunkerbuster” bombs, the Justice Department announced today. In addition, the settlement requires Kaman to adhere to a compliance program and to dismiss administrative claims that it had made against the Army after the termination of its contract.
The lawsuit, filed in the Middle District of Florida by the United States under the False Claims Act for breach of contract, alleged that the company knowingly substituted a component in four lots of fuzes that made them unsafe for use in military operations. Specifically, the United States’ allegations relate to FMU-143 fuzes for use in hard target penetration warheads, colloquially referred to as “bunkerbuster” bombs.
The government alleged that Kaman knowingly substituted non-conforming bellows motors for the specified motors in four lots of fuzes supplied to the military, and that the non-conforming parts could cause the fuzes to fire prematurely, creating a hazard for military personnel and causing misfires of the warheads. The military discovered the parts substitution and quarantined the defective fuzes.
Today’s settlement resolved those claims, as well as other administrative claims that the Army brought after it terminated Kaman’s contract for the company’s violation of its contractual obligations.
“The Department has zero tolerance for defense contractors who put the lives of our military personnel in danger,” said Tony West, Assistant Attorney General for the Civil Division. “When this type of misconduct is alleged, we will actively pursue legal remedies to reclaim taxpayer dollars as well as ensure the safety of our men and women in uniform.”
“Integrity in the procurement process is fundamental to our nation’s security and the safety of our military personnel,” said Robert E. O’Neill, U.S. Attorney for the Middle District of Florida. “This settlement represents a significant achievement in our long standing commitment to the enforcement of civil laws in the area of defense contracting.”
This settlement resulted from the efforts of the U.S. Attorney’s Office for the Middle District of Florida; the Commercial Litigation Branch of the Justice Department’s Civil Division; the Defense Criminal Investigative Service; the Army Criminal Investigation Command; and the U.S. Army Legal Services Agency Contract and Fiscal Law Division.
El Departamento de Justicia Llega a un Acuerdo Conciliatorio por 335 Millones de Dólares en Resolución de Alegatos de Discriminación en el Otorgamiento de Préstamos por Parte de Countrywide Financial Corpora...Read the Press Release
WASHINGTON - El Departamento de Justicia realizó hoy el mayor acuerdo conciliatorio de la historia asociado al otorgamiento justo de préstamos, en resolución de alegatos que Countrywide Financial Corporation y sus subsidiarias demostraron un patrón o práctica extendidos de discriminación contra prestatarios afroestadounidenses e hispanos calificados, en el otorgamiento de sus préstamos hipotecarios del 2004 al 2008.
El acuerdo conciliatorio dispone el pago de 335 millones de dólares en indemnizaciones a víctimas de la discriminación por parte de Countrywide durante un período en el que Countrywide originó millones de hipotecas para vivienda como uno de los mayores prestamistas hipotecarios de viviendas unifamiliares del país.
El acuerdo conciliatorio, sujeto a aprobación del tribunal, fue presentado hoy en el Tribunal Federal de Distrito para el Distrito Central de California, en conjunto con la demanda del departamento, la que alega que Countrywide discriminó al cobrarles a más de 200,000 prestatarios afroestadounidenses e hispanos cargos y tasas de interés más altos que a prestatarios blancos no hispanos, tanto en sus préstamos minoristas como mayoristas. La demanda alega que se les cobraron a estos prestatarios cargos y tasas de interés más altos debido a su raza u origen nacional, y no debido a la solvencia de los prestatarios u otros criterios objetivos relacionados con el riesgo que presentaban. Los Estados Unidos también alega que Countrywide discriminó al otorgar hipotecas de tipo "subprime" (subpreferenciales) a miles de prestatarios afroestadounidenses e hispanos, cuando prestatarios blancos no hispanos con perfiles de crédito similares recibieron préstamos de tipo "prime" (preferenciales). Todos los prestatarios objeto de discriminación cumplían los requisitos para hipotecas de Countrywide, de acuerdo con los propios criterios de suscripción de Countrywide.
"La acción del departamento contra Countrywide deja claro que no vacilaremos en responsabilizar a todos los prestamistas, incluyendo a los más importantes del país, por discriminación en el otorgamiento de préstamos", dijo el Secretario de Justicia de EE.UU. Eric Holder. "Los prestamistas nunca deben tomar una determinación basada en el color de la piel de la persona, sino basada en la solvencia de dicha persona. Con el acuerdo conciliatorio de hoy el gobierno federal se asegura que más de 200,000 prestatarios afroestadounidenses e hispanos que fueron objeto de discriminación por parte de Countrywide serán indemnizados".
El acuerdo conciliatorio resuelve los cargos de los Estados Unidos contra Countrywide asociados con la fijación de precios y el direccionamiento debido a su discriminación contra afroestadounidenses e hispanos.
La demanda de los Estados Unidos alega que prestatarios afroestadounidenses e hispanos pagaron más que prestatarios blancos no hispanos, no basado en el riesgo financiero que presentaban, sino debido a su raza u origen nacional. La práctica comercial de Countrywide permitió que sus oficiales de préstamos y corredores hipotecarios variaran la tasa de interés de un préstamo y otros cargos respecto al precio establecido basado en factores crediticios objetivos del prestatario. Debido a esta libertad subjetiva y sin orientación, los prestatarios afroestadounidenses e hispanos pagaron más. Asimismo, la demanda alega que Countrywide sabía que los cargos y tasas de interés que estaba cobrando discriminaban contra prestatarios afroestadounidenses e hispanos, pero falló en imponer límites o directrices concretos para impedirlo.
"Las acciones de Countrywide contribuyeron a la crisis de vivienda, hirieron comunidades completas y denegaron acceso al sueño americano a familias", dijo Thomas E. Perez, Secretario Auxiliar de la División de Derechos Civiles. "Estamos usando todas las opciones en nuestro arsenal, incluyendo algunas que habían estado inactivas por años para responsabilizar a instituciones de todo tamaño que discriminaron contra familias sólo por su raza u origen nacional".
La demanda de los Estados Unidos también alega que, como resultado de las políticas y prácticas de Countrywide, se les otorgaron a prestatarios afroestadounidenses e hispanos calificados préstamos tipo "subprime" en lugar de préstamos "prime", aunque se les otorgaron a prestatarios blancos no hispanos con calificaciones similares préstamos tipo "prime". El otorgamiento discriminatorio de los préstamos "subprime", también conocido como "direccionamiento" ["steering"], ocurrió porque era la práctica comercial de Countrywide permitir que los corredores hipotecarios y empleados otorgaran un préstamo "subprime" a un prestatario, aunque el prestatario cumpliera con los requisitos para un préstamo tipo "prime". Además, Countrywide les otorgó a los corredores hipotecarios la libertad de solicitar excepciones a las directrices de suscripción y los empleados de Countrywide tenían libertad para otorgar dichas excepciones.
Esta es la primera vez que el Departamento de Justicia alega y obtiene reparación para prestatarios a los que se les otorgaron préstamos basados en su raza u origen nacional, una práctica que sistemáticamente otorgó a prestatarios de color productos hipotecarios "subprime", y otorgó a prestatarios blancos no hispanos con solvencia similar préstamos tipo "prime". La demanda alega que al orientar a prestamistas hacia préstamos "subprime" del 2004 al 2007, Countrywide perjudicó a dichos prestamistas afroestadounidenses e hispanos calificados. Los préstamos tipo "subprime" tenían, en general, costos más altos, tales como penalidades de pago prematuro y tasas de interés ajustables que aumentaban repentinamente después de dos o tres años, haciendo impagables las cuotas y colocando a los prestatarios bajo un riesgo mucho más alto de ejecución hipotecaria.
El acuerdo conciliatorio también resuelve el alegato del departamento que Countrywide violó la Ley de Igualdad de Oportunidades de Crédito al discriminar debido al estado civil de cónyuges no solicitantes de los prestatarios, al incentivarlos a que renunciaran a sus derechos como propietarios de la vivienda. La ley permite que personas casadas soliciten crédito, ya sea en su propio nombre o conjuntamente con su cónyuge, aunque ambos cónyuges sean propietarios de la propiedad. En los casos de solicitudes presentadas por personas casadas solicitando únicamente en su propio nombre entre 2004 y 2008, Countrywide incentivó a los cónyuges no solicitantes a que firmaran escrituras de traspaso de propiedad u otros documentos, transfiriendo sus derechos legales e intereses en la propiedad conjunta al cónyuge prestatario. Los cónyuges no solicitantes que firmen un traspaso de propiedad corren el riesgo de incertidumbre y pérdidas financieras sustanciales al perder todos sus derechos e intereses en la propiedad que garantiza el préstamo.
Asimismo, el acuerdo conciliatorio exige que Countrywide implemente políticas y prácticas para prevenir la discriminación si retoma la actividad de otorgamiento de préstamos durante los próximos cuatro años. Actualmente, Countrywide opera como una subsidiaria de Bank of America, pero no otorga préstamos nuevos.
La investigación de las prácticas de otorgamiento de préstamos de Countrywide realizada por el departamento comenzó después que la Junta de Gobernadores de la Reserva Federal [Board of Governors of the Federal Reserve] y la Oficina de Supervisión de Préstamos [Office of Thrift Supervision] refirieran en el 2007 y 2008 probables patrones o prácticas de discriminación por parte de Countrywide a la División de Derechos Civiles del Departamento de Justicia.
El anuncio del día de hoy es parte de un esfuerzo en marcha de la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero del Presidente Obama. El Presidente Obama estableció la Fuerza de Tarea Interagencia de Coacción contra el Fraude Financiero para llevar a cabo una iniciativa enérgica, coordinada y proactiva para investigar y enjuiciar delitos financieros. La fuerza de tarea incluye a representantes de una amplia gama de dependencias federales, autoridades regulatorias, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando juntos, aprovechan un poderoso espectro de recursos de coacción penal y civil. La fuerza de tarea está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar los delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros y recuperar fondos para las víctimas de delitos financieros. Para obtener más información sobre la fuerza de tarea, visite www.StopFraud.gov. Se puede obtener una copia de la demanda y la orden de acuerdo conciliatorio propuesto, así como información adicional sobre la aplicación de las leyes de préstamos justos por el Departamento de Justicia, en el portal del Departamento de Justicia en Internet, www.justice.gov/fairhousing.
Defendant Charged with Alleged Participation in the Murder of ICE Special Agent Jaime Zapata and the Attempted Murder of ICE Special Agent Victor Avila Is Extradited from Mexico to the United StatesRead the Press Release
WASHINGTON – Julian Zapata Espinoza, also known as “Piolin,” has been extradited from Mexico to the United States to face charges for his alleged participation in the murder of U.S. Immigration and Customs Enforcement (ICE) Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila on Feb. 15, 2011, in Mexico.
The charges and extradition were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Ronald C. Machen Jr. for the District of Columbia; Kevin Perkins, Assistant Director for the FBI Criminal Investigative Division; and ICE Director John Morton.
On April 19, 2011, a federal grand jury in the District of Columbia returned a four-count indictment against Zapata Espinoza, charging him with one count of murder of an officer or employee of the United States, for the murder of ICE Special Agent Zapata; one count of attempted murder of an officer or employee of the United States and one count of attempted murder of an internationally protected person, both for the attempted murder of ICE Special Agent Avila; and one count of using, carrying, brandishing and discharging a firearm during and in relation to a crime of violence causing death.
“Julian Zapata Espinoza (“Piolin”) allegedly participated in the murder of ICE Special Agent Jaime Zapata and the attempted murder of ICE Special Agent Victor Avila,” said Assistant Attorney General Breuer. “The indictment unsealed today, and the successful extradition of Piolin to the United States, reflect the Justice Department’s vigorous and determined efforts to seek justice for Agents Zapata and Avila. We will continue to work closely with our law enforcement partners in Mexico to hold violent criminals accountable.”
“This prosecution exemplifies our unwavering effort to prosecute those who committed this heinous offense against U.S. law enforcement agents,” said U.S. Attorney Machen. “We will not rest until those responsible for the murder of Agent Zapata and the wounding of Agent Avila are brought to justice.”
“The extradition of Julian Zapata Espinoza to face charges in the U.S. is a significant development in the ongoing investigation into the murder of Special Agent Jaime Zapata and attack on Special Agent Victor Avila,” said Kevin Perkins, Assistant Director for the FBI Criminal Investigative Division. “This extradition would not have been possible without the dedicated efforts of all involved in this case. The FBI, DHS and the Department of Justice will continue its pursuit of justice for the Zapata family.”
“The extradition and charges filed against Zapata Espinoza is an important step in bringing Jaime and Victor’s alleged shooters to justice,” said ICE Director Morton. “All of us at ICE are encouraged by today’s action and appreciate the unwavering work and support of all our law enforcement partners in this case. Our hearts and prayers continue to go out to Jaime’s family and his close colleagues within the ICE community. ICE will continue to see that Jaime and Victor’s work is done by continuing our efforts with all involved in working on this case.”
The indictment was unsealed today, when Zapata Espinoza made his initial appearance before U.S. District Chief Judge Royce Lamberth of the District of Columbia. Zapata Espinoza was ordered detained without bail. His next appearance in court is scheduled for Jan. 25, 2012.
The case is being investigated by the FBI, with substantial assistance from ICE, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the U.S. Customs and Border Patrol, the Diplomatic Security Service and the U.S. Marshals Service. The investigation was also coordinated with the assistance of the Government of Mexico.
The case is being prosecuted by the Organized Crime and Gang Section and the Narcotic and Dangerous Drugs Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the District of Columbia. The Office of International Affairs of the Justice Department’s Criminal Division provided substantial assistance.
An indictment is a formal charging document and defendants are presumed innocent until proven guilty.
Chinese National Sentenced to 87 Months in Prison for Economic Espionage and Theft of Trade SecretsRead the Press Release
WASHINGTON – Kexue Huang, a Chinese national and a former resident of Carmel, Ind., was sentenced today to 87 months in prison and three years of supervised release on charges of economic espionage to benefit components of the Chinese government and theft of trade secrets.
The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, Assistant Attorney General for National Security Lisa O. Monaco, U.S. Attorney Joseph H. Hogsett of the Southern District of Indiana, U.S. Attorney B. Todd Jones of the District of Minnesota, and Robert J. Holley, Special Agent in Charge of the Indianapolis Field Office of the FBI.
This is the first prosecution in Indiana for foreign economic espionage. Since its enactment in 1996, there have been a total of eight cases charged nationwide under the Economic Espionage Act.
“Mr. Huang stole valuable trade secrets from two American companies and disseminated them to individuals in Germany and China,” said Assistant Attorney General Breuer. “Economic espionage and trade secret theft are serious crimes that, as today’s sentence shows, must be punished severely. Protecting trade secrets is vital to our nation’s economic success, and we will continue vigorously to enforce our trade secret and economic espionage statutes.”
“The theft of American trade secrets for the benefit of China and other nations poses a continuing threat to our economic and national security,” said Lisa Monaco, Assistant Attorney General for National Security. “Today’s sentence demonstrates our commitment to detect, prosecute and hold accountable those engaged in these illegal activities.”
“The United States Attorney’s Office takes seriously its obligation to protect Hoosier businesses from economic espionage,” U.S. Attorney Hogsett said. “I thank the federal agents and prosecutors who helped bring this landmark case to a successful conclusion.”
“The Kexue Huang investigation and prosecution is an excellent example of how law enforcement and American corporations can work together to protect our corporations from economic espionage and the theft of extremely valuable trade secrets,” FBI Special Agent in Charge Holley stated. “Dow Agrosciences and the FBI cooperated extensively to make this important investigation a success. Economic espionage is a crime that undermines the competiveness of our corporations and our national interest in protecting intellectual property. The FBI will continue to work collaboratively with the private sector to aggressively investigate those individuals that seek to harm our country’s economic interests by stealing our intellectual property and thereby undermining our competitive economic position in the world.”
Huang, 46, was sentenced by the U.S. District Judge William T. Lawrence in the Southern District of Indiana. On Oct. 18, 2011, Huang pleaded guilty to one count of an indictment filed in the Southern District of Indiana for misappropriating and transporting trade secrets from Dow AgroSciences LLC with the intent to benefit components of the People’s Republic of China (PRC). Huang also pleaded guilty to one count of an indictment filed in the District of Minnesota for stealing a trade secret from a second company, Cargill Inc.
According to court documents, from January 2003 until February 2008, Huang was employed as a research scientist at Dow, a leading international agricultural company based in Indianapolis that provides agrochemical and biotechnology products. In 2005, Huang became a research leader for Dow in strain development related to unique, proprietary organic insecticides marketed worldwide.
As a Dow employee, Huang signed an agreement that outlined his obligations in handling confidential information, including trade secrets. The agreement prohibited him from disclosing any confidential information without Dow’s consent. Dow employed several layers of security to preserve and maintain confidentiality and to prevent unauthorized use or disclosure of its trade secrets.
Huang admitted that during his employment at Dow, he misappropriated several Dow trade secrets. According to plea documents, from 2007 to 2010, Huang transferred and delivered the stolen Dow trade secrets to individuals in Germany and the PRC. With the assistance of these individuals, Huang used the stolen materials to conduct unauthorized research with the intent to benefit foreign universities that were tied to the PRC government. Huang also admitted that he pursued steps to develop and produce the misappropriated Dow trade secrets in the PRC, including identifying manufacturing facilities in the PRC that would allow him to compete directly with Dow in the established organic pesticide market.
According to court documents, after Huang left Dow, he was hired in March 2008 by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services. Huang worked as a biotechnologist for Cargill until July 2009 and signed a confidentiality agreement promising never to disclose any trade secrets or other confidential information of Cargill. Huang admitted that during his employment with Cargill, he stole one of the company’s trade secrets – a key component in the manufacture of a new food product, which he later disseminated to another person, specifically a student at Hunan Normal University in the PRC.
In the plea agreement, Huang admitted that the aggregated loss from the misappropriated trade secrets exceeds $7 million but is less than $20 million.
The case is being prosecuted by Assistant U.S. Attorney Cynthia J. Ridgeway of the Southern District of Indiana, Trial Attorneys Mark L. Krotoski and Evan C. Williams of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), and Assistant U.S. Attorney Jeffrey Paulsen of the District of Minnesota, with assistance from the National Security Division’s Counterespionage Section. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Office of International Affairs in the Justice Department’s Criminal Division.
The sentence announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Attorney General Holder Announces New Federal Bureau of Prisons DirectorRead the Press Release
Attorney General Eric Holder today announced the appointment of Charles E. Samuels Jr. as the director of the Federal Bureau of Prisons (BOP).
“I am pleased that Charles will continue to build upon 23 years of distinguished service at the department,” said Attorney General Holder. “I am confident that Charles will provide the kind of effective and innovative leadership that will increase efficiency, further expand prisoner development and reentry programs, and allow for transparency and accountability at the Federal Bureau of Prisons – while remaining true to the BOP’s core mission of protecting public safety.”
“I am very honored to be appointed by Attorney General Holder to serve as the director for the Federal Bureau of Prisons and will continue to work with the great staff at every level of the BOP to meet our mission to protect society and provide meaningful life skills and reentry programs for our inmate population,” said Samuels. “I also look forward to working with the leadership and others in the Department of Justice, throughout the federal government and in states and local communities to further the department’s goals and objectives.”
In his current position as assistant director of the Correctional Programs Division for the BOP, which he has held since January 2011, Samuels oversees all inmate management and program functions, including intelligence and counterterrorism initiatives; security and emergency planning; inmate transportation; case management; mental health and religious services; private prisons; and community corrections. Samuels is also responsible for inmate skills development and reentry initiatives, and shares the attorney general’s commitment to reduce recidivism by preparing incarcerated people to return to their communities and become productive members of society.
Samuels began his career with the BOP as a correctional officer in 1988. He was promoted to a number of positions within the BOP including correctional programs administrator and executive assistant for the Northeast Regional Office. Samuels has served as associate warden at the Federal Correctional Institutions at Otisville, N.Y. and Beckley, W.Va.; ombudsman in the BOP’s Central Office; warden at the Federal Correctional Institutions at Manchester, Ky. and Fort Dix, N.J.; and senior deputy assistant director of the Correctional Programs Division.
Samuels is a native of Birmingham, Ala. He received his Bachelor of Science in Social and Behavioral Sciences from the University of Alabama in Birmingham. Samuels is a graduate of the Harvard University Executive Education Program.
The mission of the Federal Bureau of Prisons is to protect society by confining offenders in the controlled environments of prisons and community-based facilities that are safe, humane, cost-efficient and appropriately secure, while providing work and other self-improvement opportunities to assist offenders in becoming law-abiding citizens.
Alabama Woman Sentenced to 94 Months in Prison for Stealing Identities of Student Loan BorrowersRead the Press Release
WASHINGTON – Janika Fernae Bates, a resident of Millbrook, Ala., was sentenced today in the Middle District of Alabama to 94 months in federal prison for stealing identities of student loan borrowers and providing them to a co-conspirator, who used them to file false tax returns, the Justice Department and Internal Revenue Service (IRS) announced.
On Sept. 23, 2011, a jury in Montgomery, Ala., convicted Bates of identity theft, wire fraud, aggravated identity theft and conspiracy to make false claims for tax refunds.
According to evidence introduced at the five day trial, Bates obtained the names and Social Security numbers of student loan borrowers from the databases at her former employer and conspired to use the stolen identifying information to steal money from the government and from a bank. Several victims testified that they did not consent to the use of their names and Social Security numbers on tax returns and they testified that they did not receive any money from refunds generated from the false documents filed with the IRS. Evidence also revealed that Bates and her co-conspirator, Keshia Brayboy, fraudulently obtained refund anticipation loans from a bank predicated on the fraudulently filed tax returns. Brayboy pleaded guilty in 2009 to filing a false tax return and served two years in federal prison.
U.S. District Judge Myron H. Thompson also ordered Bates to pay $246,064 in restitution to HSBC Taxpayer Financial Services and $30,211 in restitution to the IRS.
Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division commended the IRS Criminal Investigation special agents who investigated this case, Tax Division Trial Attorneys Justin Gelfand and Jason Poole, who are prosecuting the case, and U.S. Attorney George L. Beck Jr. and his entire office for their assistance.
20 December 2011
Washington Man Sentenced to 32 Years for Attempted Bombing of Martin Luther King Unity MarchRead the Press Release
SPOKANE, Wash. – The Justice Department announced today that Kevin William Harpham, 37, of Colville, Wash., has been sentenced to 32 years in prison for the placement of the improvised explosive device alongside the planned Martin Luther King Jr. Day Unity March held on Jan. 17, 2011, in Spokane, Wash. Harpham will serve the rest of his life under court supervision after he is released from prison. Harpham pleaded guilty in Sept. 7, 2011, to two counts of a superseding indictment; attempted use of a weapon of mass destruction and attempt to cause bodily injury with an explosive device because of actual or perceived race, color and national origin of any person.
On March 9, 2011, Harpham was arrested for placing the explosive device alongside the Unity March. The march was attended by approximately 2,000 individuals, including racial minorities. The explosive device placed by Harpham was capable of inflicting serious injury or death, according to laboratory analysis conducted by the FBI. Harpham admitted that he is a white supremacist and white separatist, and that he placed the explosive device at the march with the intent to cause bodily injury to the person or persons in order to further his racist beliefs.
“Acts of hate like this one have no place in our country in the year 2011, but yet, unfortunately, we continue to see attempted violence in our communities due to racial animus,” said Assistant Attorney General for the Civil Rights Division Thomas Perez. “The Justice Department is committed to enforcing the Matthew Shepard and James Byrd Jr. hate Crimes Prevention Act, and all the tools in our law enforcement arsenal, to prosecute such egregious crimes.
“This case underscores the continuing threat from those who seek to express their hatred through violence and the serious consequences these individuals face for such actions,” said Lisa Monaco, Assistant Attorney General for National Security. “The sentence handed down today is the culmination of an outstanding investigation conducted jointly by federal, state and local law enforcement officials.
Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington, said, “I commend the law enforcement efforts at all phases of the investigation and prosecution of this matter. This was one of the most thorough investigations that I have ever seen and involved multi-levels of law enforcement and multiple offices and other professionals. Our office received significant assistance from the Civil Rights Division and National Security Division of the Justice Department. All who participated should be thanked and congratulated, this was truly a team effort.” U.S. Attorney Ormsby also added, “It is very important that Mr. Harpham receive the significant sentence that he did today to send the message to our community that hate and violence will not be tolerated.”
“Today, Mr. Harpham faces the consequences of his hate-filled act. A prototypical “lone wolf” such as Mr. Harpham presents a particularly vexing threat—with nothing foreshadowing a carefully planned attack,” said Laura M. Laughlin, Special Agent-in-Charge of the FBI Seattle office. “However, the actions of everyday citizens, the Spokane Police Department, the Spokane Explosives Disposal Unit, and the round-the-clock work of Joint Terrorism Task Force and its local, state, and federal members unraveled Mr. Harpham’s plan and swiftly brought him to justice. We will continue to tirelessly disrupt and rapidly apprehend others who attempt to express their hatred though violence.”
This investigation was conducted by the Inland Northwest Joint Terrorism Task Force comprised of the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, the Federal Air Marshal Service, the U.S. Border Patrol, the Department of Homeland Security – Homeland Security Investigations, the Spokane Police Department, the Spokane County Sheriff’s Office and the Washington State Patrol, and with assistance from Stevens County Sheriff’s Office and Washington State Employment Security Department. The Stevens County Road Department also provided significant assistance.
United States Seeks Forfeiture of Property Related to Federal Firearms Smuggling and Money Laundering ChargesRead the Press Release
WASHINGTON – A 10-count civil forfeiture complaint was filed yesterday in the District of New Mexico seeking forfeiture of assets related to a gun shop in Deming, N.M., whose owner and employees were previously indicted on charges related to firearms smuggling and money laundering, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Kenneth J. Gonzales of the District of New Mexico and Dennis A. Ulrich, acting special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in El Paso, Texas.
The complaint alleges that, between April 2010 and July 2011, property associated with New Deal Shooting Sports was used in connection with, among other things, a conspiracy to make false statements in connection with the acquisition of firearms and to illegally export firearms to Mexico, a conspiracy to engage in money laundering, and a conspiracy to facilitate the trafficking of narcotics.
According to the complaint, New Deal was owned and operated by Rick Reese. Rick Reese, his wife, Terri Reese, and their two adult sons, Ryin and Remington Reese, worked at New Deal selling firearms, ammunition and other supplies. The complaint alleges, among other things, that the Reeses sold firearms and ammunition to individuals, knowing that these firearms and the ammunition were being illegally sent to Mexico. As set out in the complaint, the investigation of the Reeses included an undercover investigation by federal law enforcement officials. During the undercover investigation, the Reeses sold firearms and ammunition to confidential sources who were working with law enforcement and to undercover law enforcement agents posing as straw purchasers, believing that the confidential sources and agents intended to illegally smuggle the firearms and ammunition to Mexico.
On Aug. 30, 2011, Rick Reese, Terri Reese, Ryin Reese and Remington Reese were arrested on charges contained in a 30-count indictment filed in the District of New Mexico. An indictment is merely a charge and defendants are presumed innocent unless proven guilty.
The civil forfeiture complaint seeks forfeiture of the real property associated with New Deal, and approximately: 1,428 firearms; 1,975,262 rounds of assorted ammunition; 535 canisters of smokeless powder; 4,757 ammunition magazines; $117,823 in gold and silver coins; four vehicles registered to the New Deal; assorted body armor; 17 gun safes; approximately $11,019 from New Deal bank accounts and approximately $106,449 in cash; and one ammunition reloading bench. The properties, except for the real property associated with New Deal, were seized pursuant to seizure warrants issued by a U.S. Magistrate Judge for the District of New Mexico on Aug. 26, 2011, and executed by HSI agents on Aug. 30, 2011. The seized properties are currently in the custody of HSI officials.
The civil case is being prosecuted by Trial Attorneys Jean Weld, Pam Hicks and Kristen Warden and Deputy Chief Frederick Reynolds of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division and Assistant U.S. Attorneys Steve Kotz, Nathan Lichvarcik and Maria Y. Armijo of the District of New Mexico. The related criminal case is being prosecuted by Assistant U.S. Attorneys Lichvarcik and Armijo. The case was investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations with support from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Marshals Service, U.S. Border Patrol, U.S. Customs and Border Protection, New Mexico State Police and the Dona Ana County Sheriff’s Office.
U.S. Bureau of Prisons Employee Pleads Guilty in Florida to Sexual Abuse of a WardRead the Press Release
WASHINGTON – Bureau of Prisons employee Jack Chris Jackson, 45, pleaded guilty today to the charge of sexual abuse of a ward, announced the Department of Justice.
During the plea proceedings, Jackson admitted to having a sexual relationship with an inmate at the Federal Correctional Institute (FCI) in Miami. This inmate was in Jackson’s custodial and supervisory authority at FCI.
“We will not tolerate corrections officers engaging in this behavior with institutionalized persons,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals who abuse their position and authority in this manner.”
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer added, “This correction officer abused his official position. This conduct is an intolerable breach of trust that not only endangers the safety of inmates but also compromises prison security. Our office will prosecute all official corruption cases to the fullest extent of the law.”
Jackson faces a maximum sentence of 15 years in prison. Sentencing has been set for March 19, 2012.
This case was investigated by the FBI and the Department of Justice Office of Inspector General, and is being prosecuted by Assistant U.S. Attorney Susan Rhee Osborne of the U.S. Attorney’s Office for the Southern District of Florida and Trial Attorney Henry Leventis of the Civil Rights Division.
Twelve Charged in Cleveland for Assaulting Practitioners of the Amish ReligionRead the Press Release
WASHINGTON - The Justice Department announced today that a federal grand jury in Cleveland returned a seven-count indictment charging 10 men and two women, all residents of Ohio, with federal crimes arising out of a series of religiously-motivated assaults on practitioners of the Amish religion. The indictment addresses five separate assaults that occurred between September through November 2011. In each assault, defendants forcibly removed beard and head hair from the victims with whom they had ongoing religious disputes. As set forth in the indictment, the manner in which Amish men wear their beards and Amish women wear their hair are symbols of their faith.
“Every American has the right to worship in the manner of his or her choosing without fear of violent interference,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Civil Rights Division will aggressively investigate allegations of religiously motivated violence.”
“For nearly 500 years, people have come to this land so that they could pray however and to whomever they wished,” said U.S. Attorney for the Northern District of Ohio Steven M. Dettelbach. “Violent attempts to attack this most basic freedom have no place in our country.”
“One of our most fundamental rights is freedom of religion,” said Stephen Anthony, Special Agent in Charge of the FBI – Cleveland Field Office. “The FBI, along with our law enforcement partners, are committed to protecting this fundamental right against those who would use violence and intimidation to attack it.”
The indictment charges Samuel Mullet Sr., Johnny S. Mullet, Daniel S. Mullet, Levi F. Miller, Eli M. Miller, Emanuel Shrock, Lester Miller, Raymond Miller, Freeman Burkholder, Anna Miller and Linda Shrock with conspiracy to violate the Matthew Shepard-James Byrd Hate Crimes Prevention Act, which prohibits any person from willfully causing bodily injury to any person, or attempting to do so by use of a dangerous weapon, because of the actual or perceived religion of that person, and Title 18, U.S. Code, Section 1512, which prohibits obstruction of justice, including witness tampering and the destruction or concealment of evidence. The indictment also charges various groups of defendants with each separate assault, and charges Samuel Mullet Sr., Lester Mullet, Levi Miller and Lester Miller with concealing or attempting to conceal various items of tangible evidence, including a camera, photographs and an over-the-counter medication that was allegedly placed in the drink of one of the assault victims.
According to the indictment, Samuel Mullet Sr. is the Bishop of the Amish community in Bergholz, Ohio, while the remaining defendants are all members of that community. Mullet Sr. exerted control over the Bergholz community by taking the wives of other men into his home, and by overseeing various means of disciplining community members, including corporal punishment. As a result of religious disputes with other members of the Ohio Amish community, the defendants planned and carried out a series of assaults on their perceived religious enemies. The assaults involved the use of hired drivers, either by the defendants or the alleged victims, because practitioners of the Amish religion do not operate motor vehicles. The assaults all entailed using scissors and battery-powered clippers to forcibly cut or shave the beard hair of the male victims and the head hair of the female victims. During each assault, the defendants restrained and held down the victims. During some of the assaults, the defendants injured individuals who attempted to intervene to protect or rescue the victims. Following the attacks, some of the defendants participated in discussions about concealing photographs and other evidence of the assaults.
The maximum potential penalty for the conspiracy count is five years in prison. The maximum penalty for the hate crime charges is life in prison. The maximum penalty for the obstruction charge is 20 years in prison.
This case is being investigated by the Cleveland Division of the FBI and is being prosecuted by Assistant U.S. Attorneys Thomas Getz and Bridget M. Brennan of the U.S. Attorney’s Office for the Northern District of Ohio and Deputy Chief Kristy Parker of the Civil Rights Division’s Criminal Section.
A criminal complaint is merely an accusation. All defendants are presumed innocent of the charges until proven guilty beyond a reasonable doubt in court.
Three Operators of Miami Home Health CompanyPlead Guilty in $60 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Three operators of a Miami health care agency pleaded guilty yesterday for their participation in a $60 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
Roberto Gonzalez, 61, Olga Gonzalez, 57, and their son, Fabian Gonzalez, 39, each pleaded guilty before U.S. District Judge Ursula Ungaro in the Southern District of Florida to one count of conspiracy to commit health care fraud.
According to the court documents, Roberto Gonzalez was the president and Olga Gonzalez was the vice president of Nany Home Health Inc., a Florida home health agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries. Their son, Fabian, was head of the Quality and Assurance Department for Nany.
According to plea documents, the Gonzalezes conspired with patient recruiters, including Miami-area “staffing agencies,” for the purpose of billing the Medicare program for unnecessary home health care and therapy services. These recruiters and “staffing agencies” recruited patients to Nany, and provided prescriptions, Plans of Care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. In return, the Gonzalezes and their co-conspirators paid these staffing agencies and patient recruiters kickbacks and bribes. The Gonzaleses then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services, knowing that their behavior violated federal criminal laws.
According to plea documents, nurses and office staff at Nany falsified patient files, including by documenting non-existent “symptoms” for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services when, in fact, the beneficiaries did not actually qualify for such services. The fictitious symptoms, which suggested that the patients were unable to self-inject insulin and were homebound, formed the basis for the false claims for home health care benefits and medically unnecessary therapy filed under the Medicare program.
From approximately January 2006 through November 2009, Roberto, Olga and Fabian Gonzalez, and their co-conspirators submitted approximately $60 million in false and fraudulent claims to Medicare and Medicare paid approximately $40 million on those claims.
The pleas were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Justice Department Settles Lawsuit Alleging Retaliation by the Town of Rome, WisconsinRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a consent decree with the town of Rome, Wis., to resolve allegations that the town retaliated against an employee after she made a complaint of discrimination based on sex.
In addition to reaching the consent decree, the Justice Department also filed a complaint in U.S. District Court for the Western District of Wisconsin specifically alleging that the town of Rome violated Title VII of the Civil Rights Act of 1964 by retaliating against a female police officer for complaining about what she reasonably believed to be sex discrimination. Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, color, sex, national origin and religion. Title VII also prohibits an employer from retaliating against an individual for opposing any employment practice that would violate Title VII, for filing a discrimination charge or for assisting in the investigation of such a charge.
According to the Justice Department’s complaint, Jolene Orlowski complained to Rome’s chief of police that she was being discriminated against because of her sex. Within two weeks of Orlowski’s complaint of sex discrimination, Rome terminated her employment. According to the Justice Department’s complaint, Rome terminated Orlowski in retaliation for opposing what she reasonably believed was unlawful sex discrimination.
Under the terms of the consent decree, which must still be approved by the federal court, the town must offer to reemploy Orlowski as a police officer. The town must also pay her $351,891 in monetary relief, including back pay with interest, outstanding tuition reimbursements and compensatory damages. In addition, the town must review and adopt appropriate policies to protect its employees from discrimination and retaliation, and conduct training of its police department personnel to ensure that they properly handle future complaints of discrimination.
“If employees reasonably believe that sex discrimination has occurred in the workplace, the employees must be able to bring that concern to management’s attention without fear of the employer retaliating against them for speaking out,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Title VII not only protects those who have suffered discrimination, it also protects those who alert the employer to discrimination in the workplace. We will not tolerate public employers retaliating against their employees who report claims of unlawful discrimination.”
John W. Vaudreuil, U.S. Attorney for the Western District of Wisconsin, stated, “This consent decree with the town of Rome reaffirms—once again—the Justice Department’s commitment to aggressively enforcing federal anti-discrimination laws. Discrimination in all its forms is unacceptable.”
The continued enforcement of Title VII has been a priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.usdoj.gov/crt/.
Fort Lauderdale, Florida-Area Halfway House Operator Pleads Guilty to Fraud and Kickback SchemeRead the Press Release
WASHINGTON – The manager and operator of a Fort Lauderdale, Fla.-area halfway house pleaded guilty yesterday for his role in a Medicare fraud kickback scheme that funneled patients to a fraudulent mental health provider, American Therapeutic Corporation (ATC), announced the Department of Justice, FBI and the Department of Health and Human Services (HHS).
Butler Moultrie, 46, pleaded guilty before U.S. Magistrate Judge Barry L. Garber in Miami to one count of conspiracy to commit health care fraud.
According to court documents, most of the residents at Moultrie’s halfway house were recovering from drug and/or alcohol addictions. Nevertheless, Moultrie agreed to refer Medicare beneficiaries who resided at his halfway house to ATC purportedly to receive intensive mental health services called partial hospitalization program (PHP) treatment in exchange for illegal health care kickbacks. Moultrie knew that such kickbacks were illegal, and he knew that ATC fraudulently billed the Medicare program for the PHP services. Moultrie knew that no doctor had prescribed PHP treatment for his patient referrals, and he knew that his residents required drug and/or alcohol addiction treatment rather than mental health services.
According to court filings, ATC’s owners and operators paid kickbacks to owners and operators of assisted living facilities and halfway houses, including Moultrie, and to patient brokers in exchange for delivering ineligible patients to ATC and its related company, the American Sleep Institute (ASI). In some cases, the patients received a portion of those kickbacks. Throughout the course of the ATC conspiracy, millions of dollars in kickbacks were paid in exchange for Medicare beneficiaries who did not qualify for PHP services. The ineligible beneficiaries attended treatment programs that were not legitimate so that ATC and ASI could bill Medicare more than $200 million in medically unnecessary services.
According to the plea agreement, Moultrie’s participation in the fraud resulted in approximately $1.9 million in fraudulent billing to the Medicare program. At sentencing, scheduled for Feb. 21, 2012, Moultrie faces a maximum of 10 years in prison and a $250,000 fine.
Robert and Nikki Jenkins, two other managers and operators of halfway houses in Fort Lauderdale, were sentenced yesterday for referring beneficiaries to ATC in exchange for health care kickbacks. U.S. District Chief Judge Federico A. Moreno in Miami sentenced Robert Jenkins to 24 months in prison and Nikki Jenkins to 15 months in prison. Another halfway house operator, Irene Trematerra, was sentenced last week by U.S. District Judge Ursula Ungaro to 18 months in prison for her role in providing beneficiaries to ATC in exchange for kickbacks.
ATC, its management company Medlink Professional Management Group Inc., and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, Medlink and ASI, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed on Feb. 15, 2011. ATC, Medlink and nine of the individual defendants have pleaded guilty or have been convicted at trial. Other defendants are scheduled to begin trial on April 9, 2012, before U.S. District Judge Patricia A. Seitz.
The guilty plea and sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
These cases are being prosecuted by Trial Attorneys Steven Kim and Jennifer L. Saulino of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG and were brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants that collectively have billed the Medicare program for more than $2.9 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Former Des Moines, Iowa, Police Officers Indicted for Civil Rights Violations and Obstruction of JusticeRead the Press Release
WASHINGTON – A federal grand jury in Des Moines, Iowa, returned an indictment today charging two former Des Moines Police Department Officers Mersed Dautovic and John Mailander with violations of federal criminal laws related to an incident involving an alleged assault against a civilian on Sept. 13, 2008, the Justice Department announced today.
Count one of the indictment charges Dautovic with a criminal civil rights violation for allegedly assaulting a man during a routine traffic stop. Specifically, the indictment charges that Dautovic physically assaulted the man with a baton, resulting in bodily injury to the victim. Count two of the indictment charges both Dautovic and Mailander with obstructing justice by falsifying a written statement about the incident.
Dautovic was arrested today and appeared this afternoon before U.S. Magistrate Judge Celeste F. Bremer in the Southern District of Iowa. A detention hearing has been scheduled for 2:30 p.m. on Wednesday, Dec. 21, 2011, and trial has been scheduled for Jan. 30, 2011.
Upon conviction, the civil rights count in the indictment carries a maximum sentence of 10 years in prison. The obstruction count carries a maximum sentence of 20 years in prison. Each count also carries a maximum fine of $250,000.
This case is being investigated by the FBI’s Des Moines Division, and is being jointly prosecuted by the U.S. Attorney’s Office for the Southern District of Iowa and trial attorneys from the Civil Rights Division of the Department of Justice.
An indictment is only an accusation and the defendants are presumed innocent unless and until proven guilty.
Federal Court Bars Alabama Woman from Preparing Tax ReturnsRead the Press Release
WASHINGTON – A federal court in Mobile, Ala., has permanently barred Delois Warren from preparing federal tax returns for others, the Justice Department announced today. Judge Kristi K. DuBose of U.S. District Court for the Southern District of Alabama issued the permanent injunction order.
The government complaint in the case alleged that Warren of Greensboro claimed bogus earned-income tax credits and first-time-homebuyer credits for her customers through her business, Branjalo Tax Service. According to the complaint, Warren prepared income tax returns for some customers falsely claiming that they were engaged in profitable businesses in order to maximize refunds based on the earned-income tax credit. The complaint also states that Warren claimed the first-time-homebuyer credit on at least 190 returns in 2009. In examples cited in the complaint, Warren claimed the credit for as much as $8,000 for customers who did not purchase houses in 2008.
The civil injunction order requires Warren to mail a copy of the order to all persons for whom she has prepared a federal tax return since Jan. 1, 2007, and to give the government a list of those customers.
In the last decade, the Justice Department’s Tax Division has obtained hundreds of injunctions to stop tax fraud promoters and unscrupulous tax return preparers. Information about these cases is available on the Justice Department’s website .
Chinese Perfume Importer Sentenced in Brooklyn to 12 Months in Prison for Trafficking in Counterfeit PerfumeRead the Press Release
WASHINGTON – A Chinese perfume importer was sentenced in Brooklyn yesterday to 12 months in prison for trafficking in counterfeit perfume, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Loretta E. Lynch for the Eastern District of New York.
Shaoxiong Zhou, 42, of Shantou, Guangdong, China, was sentenced by U.S. District Judge Sandra L. Townes in the Eastern District of New York. Judge Townes also ordered Zhou to pay $20,000 in restitution.
Zhou pleaded guilty Aug. 5, 2011, to one count of trafficking in counterfeit goods. Zhou admitted that he offered to supply counterfeit perfume to prospective buyers at a Las Vegas trade show in August 2010. Zhou also admitted that he shipped a cargo container of counterfeit perfume to a facility in Staten Island, N.Y., in January 2011. That shipment, which was seized by U.S. Customs and Border Protection upon arrival in the United States, was found to contain approximately 37,000 units of perfume bearing counterfeit marks and made to resemble fragrance products from several well-known brands, including Lacoste, Polo Black and Armani Code.
Zhou and codefendant Shaoxia Huang were arrested March 2, 2011, in Las Vegas and have been in custody since that time. Huang pleaded guilty Aug. 3, 2011, to one count of trafficking in counterfeit goods, and was sentenced on Dec. 7, 2011, to nine months in prison and was ordered to pay $20,000 in restitution.
The case is part of a federal investigation of the importation and distribution of counterfeit perfume and cosmetics products being conducted by U.S. Immigration and Customs Enforcement - Homeland Security Investigations. The case is being prosecuted by Senior Counsel Jason Gull of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.
The sentence announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce/.
Attorney Charged in Multi-Million Dollar Stock FraudRead the Press Release
WASHINGTON – An attorney for a South Carolina health care device company, Signalife, was arrested on Dec. 18, 2011, at Los Angeles International Airport on charges related to his alleged role in a multi-million dollar market manipulation fraud scheme, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced today.
An indictment unsealed yesterday in U.S. District Court for the Southern District of Florida charges attorney Mitchell J. Stein, 53, of Hidden Hills, Calif., and Boca Raton, Fla., with one count of conspiracy to commit mail fraud and wire fraud, three counts of mail fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering and one count of conspiracy to obstruct justice. The indictment also seeks forfeiture of the proceeds of the offenses.
The indictment alleges that Stein engaged in a scheme to artificially inflate the stock price of Signalife Inc. by creating the false impression of sales activity for the company. Signalife, now known as Heart Tronics, was a publicly traded company that purportedly sold electronic heart monitoring devices. According to the indictment, Stein’s wife held approximately 85 percent of the shares of Signalife.
The indictment alleges that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers and then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. The indictment also alleges that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
The indictment further alleges that Stein and his co-conspirators sold shares of Signalife stock at inflated prices, disguising the fact that they were doing so by placing the shares in purportedly blind trusts. In addition to selling shares in that manner, Stein and his co-conspirators allegedly also caused Signalife to issue additional shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein and his co-conspirators.
According to the indictment, Stein also conspired to obstruct an SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
If convicted, Stein faces up to 20 years in prison on each count of mail fraud, wire fraud, securities fraud, and conspiracy to commit mail and wire fraud, as well as up to 10 years in prison on each count of money laundering and up to five years in prison on the conspiracy to obstruct justice count.
The SEC conducted a parallel investigation and today announced its filing of a civil enforcement action against Stein and others. The department thanks the SEC for its substantial assistance in this matter.
This continuing investigation is being conducted by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. This case is being prosecuted by Trial Attorneys Andrew H. Warren and Albert B. Stieglitz Jr. of the Criminal Division’s Fraud Section.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .
Aon Corporation Agrees to Pay a $1.76 Million Criminal Penalty to Resolve Violations of the Foreign Corrupt Practices ActRead the Press Release
WASHINGTON – Aon Corporation, a publicly traded corporation headquartered in Chicago and one of the largest insurance brokerage firms in the world, has entered into an agreement with the Department of Justice to pay a $1.76 million penalty to resolve violations of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
According to the non-prosecution agreement, Aon’s United Kingdom subsidiary, Aon Limited, administered certain training and education funds in connection with its reinsurance business with Instituto Nacional De Seguros (INS), Costa Rica’s state-owned insurance company. The supposed purpose of the funds was to provide education and training for INS officials. However, between 1997 and 2005, Aon Limited used a significant portion of the funds to reimburse INS officials for non-training related activity, including travel with spouses to overseas tourist destinations, or for uses that could not be determined from Aon’s books and records. Many of the invoices and other records for trips taken by INS officials did not provide any business purpose for the expenditures, or showed that the expenses were clearly not related to a legitimate business purpose.
As part of the agreement, Aon admitted that Aon Limited’s accounting books and records related to the funds, which were consolidated into Aon’s books and records, did not accurately and fairly reflect the purpose for which the expenses were incurred. Aon also admitted that it failed to devise and maintain an adequate system of internal accounting controls with respect to foreign sales activities sufficient to ensure compliance with the FCPA.
In addition to the monetary penalty, the agreement requires that Aon Corporation adhere to rigorous compliance, bookkeeping and internal controls standards and cooperate fully with the department.
The department entered into a non-prosecution agreement with Aon as a result of Aon’s extraordinary cooperation with the department and the U.S. Securities and Exchange Commission (SEC); its timely and complete disclosure of improper payments in Costa Rica and other countries that it discovered during its thorough investigation of its global operations; its early and extensive remedial efforts; the prior financial penalty of £5.25 million that Aon Limited paid to the United Kingdom’s Financial Services Authority (FSA); and the FSA’s close and continuous supervisory oversight over Aon Limited. These factors also led to a substantially reduced monetary penalty.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .
In a related matter, Aon Corporation reached a settlement with the SEC and agreed to pay approximately $14.5 million in disgorgement and prejudgment interest. The SEC settlement was filed today.
This case is being handled by Trial Attorney Andrew Gentin of the Fraud Section in the Justice Department’s Criminal Division with assistance from the FBI’s Washington Field Office’s dedicated FCPA squad. The department acknowledges and expresses its appreciation for the assistance provided by the SEC’s Division of Enforcement.
19 December 2011
US, Canada and Mexico Antitrust Officials Participate in Trilateral Meetings in Mexico to Discuss Antitrust EnforcementRead the Press Release
WASHINGTON – The heads of the antitrust agencies of the United States, Canada and Mexico – Acting Assistant Attorney General Sharis A. Pozen of the Department of Justice’s Antitrust Division, Chairman Jon Leibowitz of the Federal Trade Commission, Canadian Commissioner of Competition Melanie Aitken and President Eduardo Perez Motta of the Mexican Federal Competition Commission – met today to reaffirm their commitment to effective enforcement cooperation. The discussions covered a wide range of enforcement and policy issues, including updates on merger policy and enforcement in the three jurisdictions and the sharing of recent experience in areas of mutual enforcement interest.
“Working with our antitrust colleagues across both United States borders to ensure that antitrust enforcement is effective is good for businesses and consumers,” said Acting Assistant Attorney General Pozen. “The department values its close law enforcement relationships with Canada and Mexico, and I look forward to our continued efforts to work together to combat anticompetitive activity that affects North America.”
The United States, Canada and Mexico are parties to a series of bilateral antitrust cooperation agreements that commit their antitrust agencies to cooperate and coordinate with each other in order to make their antitrust policies and enforcement as consistent and effective as possible. The three nations also are parties to the North American Free Trade Agreement, which includes a competition chapter that provides for cooperation among them in antitrust investigations.
Statement of Attorney General Eric Holder on the 2011 Preliminary Uniform Crime ReportRead the Press Release
WASHINGTON – Attorney General Eric Holder today issued the following statement on the release of the FBI’s Preliminary Uniform Crime Report showing a continued decrease in violent crime nationwide. The results show that the number of violent crimes reported in the first six months of 2011 declined 6.4 percent when compared with figures from the first six months of 2010.
“Safe neighborhoods are the underpinning of our nation’s prosperity, and this Department of Justice has made protecting the American people from violent crime a top priority. The results of the 2011 Preliminary Uniform Crime Report show that the decline in violent crime in recent years continued in the first half of 2011.
“Working with our state, local and tribal partners, federal prosecutors and agents have increased community participation in our shared efforts to hold accountable those whose illegal activity spread fear into our communities. We have targeted violent criminals involved in gang-related activity from Florida to California, organized crime networks in cities across this country and drug trafficking organizations that extend beyond our borders.
“Ensuring that law enforcement has the necessary resources is critical to continuing our aggressive fight against violent crime. Although we can all be encouraged that violent crime rates continue to decline nationwide, it is clear that we must remain vigilant and more work remains to be done. In recent months, we have seen an alarming spike in law enforcement fatalities and the number of line-of-duty law enforcement deaths. This is appalling and unacceptable. And it is why we will continue making investments to provide life-saving equipment, training and information-sharing capabilities to our courageous men and women in the field.
“We also recognize that enforcement alone will not prevent every future crime, which is why we’ve launched initiatives in communities across this country to fight recidivism and support reentry programs. We will continue to support our state, local and tribal partners and to implement the tough, smart policing policies that we know make a difference in the fight against violent crime."
The report can be found here: http://www.fbi.gov/news/stories/2011/december/crime-stats_121911/crime-stats_121911.
Nurse, Administrator and Two Recruiters for Miami Home Health Companies Sentenced to Prison in $25 Million Health Care Fraud SchemeRead the Press Release
WASHINGTON – Two patient recruiters, a nurse and an administrator for two Miami home health care companies were sentenced today for their participation in a $25 million home health Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).
The defendants were sentenced by U.S. District Judge Joan A. Lenard in the Southern District of Florida.
- Licet Diaz, 49, was sentenced to 87 months in prison, three years of supervised release and ordered to pay $7.8 million in restitution.
- Fidel Castro, 49, was sentenced to 30 months in prison, three years of supervised release and ordered to pay $550,000 in restitution.
- Ignacio Angulo, 48, was sentenced to 18 months in prison, two years of supervised release and ordered to pay $190,000 in restitution.
- Barbara Gonzalez, 38, was sentenced to six months in prison, two years of supervised release and ordered to pay $40,000 in restitution.
Castro, Gonzalez, Angulo and Diaz each pleaded guilty earlier this year to one count of conspiracy to commit health care fraud. They were each ordered to pay their restitution jointly and severally with co-defendants.
According to court documents, Castro and Gonzalez were patient recruiters for ABC Home Health Care Inc., a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries. Angulo was a nurse and patient recruiter for Florida Home Health Care Providers Inc., another related Miami home health care agency. Diaz was an administrator for ABC and Florida Home Health. According to court documents, ABC and Florida Home Health only existed to defraud Medicare.
Castro, Gonzalez and Angulo admitted that beginning in approximately January 2006 and continuing until approximately March 2009, they recruited Medicare beneficiaries who would allow ABC and Florida Home Health to bill Medicare for home health care and therapy services that were medically unnecessary and/or never provided. Castro, Gonzalez, and Angulo solicited and received kickbacks and bribes from the owners and operators of ABC and Florida Home Health in return for recruiting patients. Castro, Gonzalez and Angulo knew that the patients they recruited did not qualify for the services billed to Medicare and that the files for the recruited patients were falsified to make it appear that the patients qualified for the services.
According to court documents, Angulo, a licensed practical nurse, along with his co-defendant nurses, falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for home health care and therapy services. Angulo admitted that he knew the beneficiaries did not qualify for and did not receive the services. The files were falsified so that Medicare could be billed for medically unnecessary therapy and home health related services.
According to plea documents, Diaz distributed kickback payments to the patient recruiters on behalf of the owners of ABC and Florida Home Health. Diaz worked in the offices of ABC and Florida Home Health and was aware that office staff manipulated the patient files and nursing notes for patients at ABC and Florida Home Health.
As a result of the participation of Castro, Gonzalez, Angulo and Diaz in the illegal scheme, the Medicare program was billed approximately $550,000, $40,000, $190,000 and $7.8 million, respectively, for purported home health care services that were not medically necessary and/or were not provided.
The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.
This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
New Jersey Solid Waste Management Facility Sentenced After Illegally Dumping in Upstate New YorkRead the Press Release
WASHINGTON – Lieze Associates, dba Eagle Recycling, of New Jersey, was sentenced today in federal court in Utica, N.Y., following their guilty plea to conspiring to violate the Clean Water Act and to defrauding the United States, the U.S. Attorney’s Office for the Northern District of New York and the Department of Justice Environment and Natural Resources Division announced today.
Eagle Recycling was sentenced to pay a $500,000 criminal fine and more than $70,000 in restitution and cleanup costs. The judge also imposed three years corporate probation and ordered that its recycling facility formulate, fund and implement an environmental compliance plan to prevent future environmental violations at their North Bergen, N.J., operation.
According to the charges and plea agreement, Eagle Recycling and other co-conspirators engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at Eagle Recycling’s North Bergen solid waste management facility and then transported to a farmer’s property in Frankfort, N.Y. Eagle Recycling and other conspirators then concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forging the name of a DEC official on the fraudulent permit.
This case was investigated by criminal investigators with the New York State Environmental Conservation Police, Bureau of Environmental Crimes; special agents from the EPA's Criminal Investigation Division and the Internal Revenue Service; and investigators from the New Jersey State Police Office of Business Integrity Unit, the New Jersey Department of Environmental Protection and the Ohio Department of Environmental Protection. The case is being prosecuted by Assistant U.S. Attorney Craig A. Benedict of the Northern District of New York and Todd W. Gleason of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Michigan Tax Defiers Sentenced to Jail for Tax Fraud SchemeRead the Press Release
WASHINGTON - David A. Cusumano of Plymouth, Mich., and Henry Nino, a resident of Northville, Mich., were sentenced today following their pleas of guilty to tax evasion, the Justice Department and Internal Revenue Service Criminal Investigation (IRS-CI) announced today. District Court Judge Gerald E. Rosen, presiding in Detroit, sentenced Cusumano to 15 months and Nino to 18 months in prison. Judge Rosen also imposed three years of supervised release for each defendant.
According to court documents, Cusumano was a mechanical engineer who worked at various companies throughout Michigan. Nino was an electrician with an automotive company. Despite earning substantial income in their respective jobs, for multiple years, Cusumano and Nino failed to file income tax returns and failed to pay taxes due and owing to the IRS, Cusumano during the calendar years 2003-2008 and Nino during the calendar years 2004-2008. Both men successfully prevented their employers from withholding federal income taxes from their wages by submitting false IRS Forms W-4 to their employers on which they falsely claimed they were “exempt” from income tax withholding. A Form W-4 is a document that an employee submits to an employer to assist the employer in withholding the correct amount of income taxes from the employee’s pay.
The plea agreements state that in addition to failing to file income tax returns and submitting false Forms W-4 to their employers, the two men also attempted to prevent the IRS from determining their tax liabilities and collecting their unpaid taxes by participating in several obstructive schemes. Both men paid tax fraud promoters, including a Florida-based organization called American Rights Litigators/Guiding Light of God Ministries to submit frivolous and obstructive correspondence to the IRS and to the defendants’ employers, including false complaints that wrongly accused IRS employees of criminal activity. Cusumano and Nino also submitted multiple fake financial instruments to the IRS in a failed attempt to pay off their outstanding tax debts.
Court documents state that Nino also attempted to prevent the IRS from collecting his unpaid taxes for the years 1996, 1997 and 2000-2003 by, among other things, transferring title of his personal residence to a nominee entity called the Michigan Natural Group, using money orders to make mortgage payments and cashing paychecks rather than depositing them in a bank account.
Cusumano caused a tax loss to the government of $390,145. Nino’s conduct resulted in a tax loss of $366,088. Under the terms of their plea agreements, both are required to make restitution to the IRS in the amount of their unpaid taxes.
This case was investigated by Special Agents from IRS-CI, and prosecuted by Trial Attorneys Jeffrey A. McLellan and Melissa S. Siskind of the Justice Department’s Tax Division.
Justice Department Recovers $3 Billion in False Claims Act Cases in Fiscal Year 2011Read the Press Release
WASHINGTON – The Justice Department secured more than $3 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2011, Tony West, Assistant Attorney General for the Civil Division, announced today. This is the second year in a row that the department has surpassed $3 billion in recoveries under the False Claims Act, bringing the total since January 2009 to $8.7 billion – the largest three-year total in the Justice Department’s history.
The $3 billion total for fiscal year 2011 includes a record $2.8 billion in recoveries under the whistleblower provisions of the False Claims Act, which is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, payments on military contracts, and federal subsidies and loans. The department has recovered more than $30 billion under the False Claims Act since the act was substantially amended in 1986. The 1986 amendments strengthened the act and increased the incentives for whistle blowers to file lawsuits on behalf of the government. That in turn led to an unprecedented number of investigations and greater recoveries.
“Twenty-eight percent of the recoveries in the last 25 years were obtained since President Obama took office,”Assistant Attorney General West said. “These record-setting results reflect the extraordinary determination and effort that this administration, and Attorney General Eric Holder in particular, have put into rooting out fraud, recovering taxpayer money and protecting the integrity of government programs.”
Assistant Attorney General West noted that the $3 billion recovered this year included $2.4 billion in recoveries involving fraud committed against federal health care programs. Most of these recoveries are attributable to the Medicare and Medicaid programs administered by the Department of Health and Human Services (HHS). They also include the TRICARE program administered by Department of Defense (DoD), the Federal Employees Health Benefits program administered by the Office of Personnel Management and Veterans Administration health programs.
Fighting health care fraud is a top priority for the Obama Administration. On May 20, 2009, the Attorney General and HHS Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. Since January 2009 alone, the department has used the False Claims Act to recover more than $6.6 billion in federal health care dollars. This is more recovered under the act than in any other three-year period.
The historic $2.8 billion recovered in whistle blower cases came from suits filed under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens, known as relators, to file lawsuits on behalf of the government. In the 25 years since the False Claims Act was substantially amended, whistle blowers have filed more than 7,800 actions under the qui tam provisions. Qui tam suits hit a peak of 638 this past year, after hovering in the 300s and low 400s for much of the decade.
Assistant Attorney General West thanked the courageous citizens who have come forward to report fraud, often at great personal risk: “We are tremendously grateful to whistle blowers who have brought fraud allegations to the government’s attention and assisted us in this public-private partnership to fight fraud,” he said.
In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act, including enhancements to the qui tam provisions to encourage whistle blowers to come forward with allegations of fraud. In this 25th anniversary year of the 1986 amendments, Assistant Attorney General West paid tribute to the bill’s sponsors, saying that “without their foresight, the breadth of the recoveries we announce here today would not have been possible.” He also expressed his gratitude to Senator Patrick J. Leahy, chairman of the Senate Judiciary Committee, and to Senator Grassley and Representative Berman for their support of the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes.
Assistant Attorney General West also applauded Congress’ passage of the Affordable Care Act (ACA) in 2010, which reenforced the government’s ability to redress fraud in the nation’s health care system. Among many other changes, the ACA amended the False Claims Act to provide additional incentives for whistle blowers to report fraud to the government and strengthened the provisions of the federal health care Anti-Kickback Statute.
Enforcement actions involving the pharmaceutical industry were the source of the largest recoveries this year. In all, the department recovered nearly $2.2 billion in civil claims against the pharmaceutical industry in fiscal year 2011, including $1.76 billion in federal recoveries and $421 million in state Medicaid recoveries. These cases included $900 million from eight drug manufacturers to resolve allegations that they had engaged in unlawful pricing to increase their profits. Additionally, GlaxoSmithKline PLC paid $750 million to resolve criminal and civil allegations that the company knowingly submitted, or caused to be submitted, false claims to government health care programs for adulterated drugs and for drugs that failed to conform with the strength, purity or quality specified by the Food and Drug Administration.
Adding to its successes under the False Claims Act, the department obtained 21 criminal convictions and $1.3 billion in criminal fines, forfeitures, restitution, and disgorgement under the Food, Drug and Cosmetic Act (FDCA). The FDCA’s criminal provisions are enforced by the Civil Division’s Consumer Protection Branch.
In addition to health care, the department continued its aggressive pursuit of fraud in government procurement and other forms of financial fraud, including grant, housing and mortgage fraud that emerged in the wake of the financial crisis. In November 2009, President Obama established the Financial Fraud Enforcement Task Force to hold accountable the individuals and corporations who contributed to the crisis as well as those who would claim illegal advantage through false claims for funds intended to stimulate economic recovery. Of the $3 billion in fiscal year 2011 recoveries, these non-war related procurement and consumer-related financial fraud cases accounted for nearly $358 million.
Overall, the department recovered $422 million in fiscal year 2011 in procurement fraud cases, including $89.3 million in recoveries in connection with the wars in Southwest Asia. This brings civil fraud recoveries in connection with the wars in Southwest Asia since January 2009 to $153.4 million, and the total amount recovered in procurement fraud cases during that time to $1.5 billion, again a greater amount than in any previous three-year period.
Assistant Attorney General West expressed his deep appreciation for the dedicated public servants who contributed to the investigation and prosecution of these cases. These individuals include attorneys, investigators, auditors and other agency personnel throughout the Civil Division, the U.S. Attorneys’ Offices, HHS, DoD and the many other federal and state agencies.
Justice Department Issues Statements Regarding AT&T Inc.'s Abandonment of Its Proposed Acquisition of T-Mobile USA Inc.Read the Press Release
WASHINGTON – Deputy Attorney General James M. Cole and Acting Assistant Attorney General for the Antitrust Division Sharis A. Pozen issued the following statements today after AT&T Inc. abandoned its proposed acquisition of T-Mobile USA Inc. from its parent company, Deutsche Telekom AG:
Deputy Attorney General Cole:
“This result is a victory for the millions of Americans who use mobile wireless telecommunications services. A significant competitor remains in the marketplace and consumers will benefit from a quick resolution of this matter without the unnecessary expense of taxpayer money and government resources.”
Acting Assistant Attorney General Pozen:
“Consumers won today. Had AT&T acquired T-Mobile, consumers in the wireless marketplace would have faced higher prices and reduced innovation. We sued to protect consumers who rely on competition in this important industry. With the parties’ abandonment, we achieved that result.”
On Aug. 31, 2011, the department filed a lawsuit in U.S. District Court for the District of Columbia, to block the transaction, which would have combined two of the only four wireless carriers with nationwide networks. State attorneys general from California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Puerto Rico and Washington joined the United States as co-plaintiffs. The department coordinated its review of the proposed transaction with the Federal Communications Commission.
Illinois Company to Pay $500,000 Fine for Violating Do Not Call Provisions of the Telemarketing Sales RuleRead the Press Release
WASHINGTON – Americall Group Inc. (AGI), a Naperville, Ill., telemarketing company specializing in sales for financial service and insurance companies, has agreed to settle charges that AGI violated “do not call” provisions of the Telemarketing Sales Rule, the Justice Department announced today. Under the settlement agreement, AGI will pay $500,000 in civil penalties. In addition, AGI will be subject to a court injunction barring the company from violating the Telemarketing Sales Rule in the future and subjecting the company to potential contempt sanctions if it does.
Under the Telemarketing Sales Rule, consumers are allowed to add their names to a telemarketer’s internal do-not-call list even where the consumer has a pre-existing business relationship with the company or is not listed on the national Do Not Call Registry. The complaint against AGI, filed in November 2011, alleged that the company did not honor basic do-not-call requests unless consumers used specific language beyond what the law requires. This case marks the first time the government has pursued this type of alleged misconduct in a Telemarketing Sales Rule case. The complaint further alleged that AGI violated the Telemarketing Sales Rule by transmitting names other than its own or those of its clients to consumer caller ID devices.
The case was referred to the Department of Justice by the Federal Trade Commission (FTC), which oversees and investigates violations of the Telemarketing Sales Rule. More than 3,000 consumer complaints concerning Telemarketing Sales Rule violations by AGI led the FTC to investigate the company.
Along with the civil penalty, AGI agreed to an injunction barring the company from violating the Telemarketing Sales Rule in the future.
“Sometimes we don’t want to be bothered by unsolicited, unwanted sales calls--that’s why we have the Telemarketing Sales Rule,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “And that’s why companies that ignore consumers’ wishes and play games with the telemarketing rules will be held accountable.”
The case, United States v. Americall Group Inc., was filed in the Northern District of Illinois.
Assistant Attorney General West thanked the FTC for its assistance with this matter. The Consumer Protection Branch of the Justice Department’s Civil Division brought the case on behalf of the United States.
Florida Loan Officer Sentenced in Connection with $2.5 Million Reverse Mortgage and Loan Modification SchemeRead the Press Release
WASHINGTON – A Florida loan officer was sentenced today by U.S. District Court Judge William P. Dimitrouleas in Ft. Lauderdale, Fla., for his participation in a nationwide $2.5 million reverse mortgage fraud scheme, the Justice Department announced.
John Incandela, 25, of Palm Beach, Fla., was sentenced to 41 months in prison, three years of supervised release and ordered to pay over $1.9 million in restitution. Louis Gendason, 42, of Delray Beach, Fla., is scheduled to be sentenced on Jan. 20, 2012.
A reverse mortgage, also known as a Home Equity Conversion Mortgage, allows borrowers who are at least 62 years of age to convert the equity in their homes into a monthly stream of income, or a line of credit. Unlike the traditional mortgage loan scenario, in which borrowers make monthly payments to a mortgage lender in satisfaction of their outstanding loan, in a reverse mortgage loan scenario, the mortgage lender purchases borrowers’ equity and makes installment payments to the borrower.
According to the information and statements made during the August 2011 hearing in the case, from May 2009 through November 2010, the defendants engaged in a reverse mortgage scheme that defrauded unwitting borrowers, Genworth Financial Home Equity Access Inc. and the Federal Housing Administration (FHA). Working as a loan officer, Incandela, along with co-defendant Marcos Echevarria, 29, of Palm Beach, solicited seniors to refinance their existing mortgages with a reverse mortgage loan financed by Genworth. To qualify the borrowers for these loans, co-defendant Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers’ properties. In fact, however, none of the borrowers had sufficient equity in their properties to qualify for a reverse mortgage. The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2.5 million in reverse mortgage loans.
As part of the scheme, co-defendant Kimberly Mackey, 47, of Pittsburgh, a licensed title agent, fraudulently closed the Genworth loans and did not pay off the borrowers’ existing mortgage loans. Mackey attempted to conceal the fraudulent loan closings by preparing false settlement documents that showed that the existing mortgages had, in fact, been paid off. The defendants divided up the loan proceeds and used the money for their personal benefit. On Nov. 3, 2011, Mackey and Echevarria received prison sentences of 60 and 24 months, respectively, for their roles in the scheme.
The defendants further engaged in a loan modification scheme to conceal the existence of the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. To this end, Gendason, Incandela and Mackey conspired to create fictitious offers to buy some of the borrowers’ properties, in the form of “short sales.” A short sale is a sale of real estate in which the sale proceeds are less than the balance owed on the loan to the mortgage lender, but avoids foreclosure and related costs. In other instances, to hide the existence of the Genworth reverse mortgage loan from the original lenders, the defendants made monthly mortgage payments to the borrowers’ original lenders.
“The masterminds of this mortgage fraud scheme targeted elders who were looking for a little financial security in their golden years,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “This sentence--the third in this case--sends a strong message to those tempted to defraud consumers: these crimes do not pay.”
The case was investigated by the U.S. Department of Housing and Urban Development Office of Inspector General, the U.S. Postal Inspection Service, the FBI and the Florida’s Office of Financial Regulation, with assistance from the U.S. Secret Service and Genworth Financial Home Equity Access. The case was prosecuted by Kevin J. Larsen, a Trial Attorney in the Justice Department’s Consumer Protection Branch, and Assistant U.S. Attorneys Jeffrey H. Kay and Thomas Lanigan of the Southern District of Florida.
Department of Justice Releases Investigative Findings on the East Haven, Connecticut, Police DepartmentRead the Press Release
WASHINGTON – Following a thorough investigation, the Justice Department today announced its findings that the East Haven Police Department (EHPD) has engaged in a pattern or practice of discrimination against Latinos in violation of the Constitution and federal law.
Launched in September 2009, the investigation was conducted under provisions of the Violent Crime Control and Law Enforcement Act of 1994, the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964.
Specifically, the investigation found that EHPD intentionally targets Latinos for traffic enforcement and treats Latino drivers more harshly after traffic stops in violation of the Fourteenth Amendment, Title VI and the Safe Streets Act. The investigation further found that EHPD has willfully enabled discrimination by failing to put in place basic law enforcement practices and procedures used by law enforcement agencies across the country to prevent discrimination.
The Department of Justice findings are based on:
- a statistical analysis demonstrating that Latino drivers are disproportionally targeted for traffic stops;
- an analysis of traffic stops showing that officers use non-standard and, in some cases, unacceptable, justifications for stops that are not employed against non-Latino drivers, and post-stop treatment that shows EHPD treating Latino drivers more punitively than non-Latino drivers;
- serious incidents of abuse of authority and retaliation against individuals who criticize or complain of EHPD’s discriminatory treatment of Latinos; and
- a failure to remedy a history of discrimination and a deliberate indifference to the rights of minorities, including EHPD’s failure to guide, train, supervise and discipline officers engaged in unlawful discrimination.
The department also found a number of serious deficiencies in EHPD’s management, oversight and accountability systems that have enabled discriminatory policing by EHPD officers. These deficiencies include:
- a failure to collect and report traffic stop data in accordance with state racial profiling laws;
- a failure to implement policies prohibiting discrimination;
- a failure to hold officers accountable through internal investigations;
- a failure to provide limited English proficient Latinos with appropriate language access; and
- a failure to abide by individuals’ consular rights.
In addition, although not making formal findings, the department noted two areas of serious concern regarding allegations of use of excessive force and unconstitutional searches and seizures. The department also expressed concern with EPHD leadership creating and condoning a hostile and intimidating environment for anyone seeking to provide relevant information in this investigation.
“These findings show that the East Haven Police Department systematically violated the constitutional rights of people it is supposed to serve and protect. By failing to have in place the most basic systems designed to protect individuals from unlawful discrimination, EHPD has fallen short of its obligations,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The recommendations we make will put the police department on a path towards correcting the serious deficiencies that have long plagued the department and regaining the community’s trust.”
“The residents of East Haven should not have to choose between effective crime-fighting and constitutional policing,” said U.S. Attorney David Fein. “By addressing the serious deficiencies we uncovered, EHPD will not only ensure constitutional policing, but will also give the men and women of EHPD the support they need to combat crime effectively.”
The Justice Department’s comprehensive and independent investigation was conducted by department attorneys, investigators and police executives and other experts who interviewed EHPD officers and residents in East Haven. The investigation also involved exhaustive review of documents and data, including EHPD policies and procedures, incident reports and traffic stop activity. This civil investigation was separate from any ongoing criminal investigations of EHPD.
Federal law permits the attorney general to initiate a civil action in the name of the United States against the town of East Haven, EHPD and its officials to remedy the pattern or practice of misconduct and ensure compliance with the Constitution and federal law. The department will work with town officials to obtain voluntary compliance through a court-enforceable agreement that will lead to sustainable reforms. Should EHPD and East Haven choose to not cooperate in reaching an agreed-upon remedy, the department may seek relief unilaterally from the federal courts.
This investigation was conducted by the Special Litigation Section of the Civil Rights Division in coordination with the U.S. Attorney’s Office for the District of Connecticut and with the assistance of expert police consultants. Starting tomorrow, members of the community who may wish to provide information to the department in furtherance of this investigation may call 1-855-202-1830 or email [email protected]
The findings letter can be found at www.justice.gov/crt/about/spl/easthavenpd.php. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.
16 December 2011
Patient Recruiter Pleads Guilty in Health Care Fraud ConspiracyRead the Press Release
WASHINGTON – A patient recruiter for Alliance Healthcare Services L.P., a Dallas home health care agency, pleaded guilty yesterday for her participation in a scheme to defraud Medicare and Medicaid, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS). Four co-owners of Alliance pleaded guilty last week for their roles in the fraud scheme.
Ollie Futrell, 56, of Garland, Texas, pleaded guilty yesterday before U.S. District Judge Jane J. Boyle in the Northern District of Texas to one count of conspiracy to commit health care fraud. Ernest Amadi and his wife, Edith Amadi, both of Wylie, Texas, pleaded guilty to the same charge on Dec. 6, 2011. George Opurum and his wife, Agatha Opurum, both of Richardson, Texas, also pleaded guilty to conspiracy to commit health care fraud on Dec. 8, 2011. The five defendants were indicted and arrested in February 2011. This case was the first case to be prosecuted by the Medicare Fraud Strike Force in Dallas.
According to court documents, Ernest Amadi, 53, was the chief executive officer and administrator of Alliance, and George Opurum, 60, was the chief financial officer and alternate administrator of Alliance. Edith Amadi, 49, and Agatha Opurum, 53, were both nurses at Alliance.
As part of the conspiracy, from November 2008 through mid-February 2011, Alliance submitted claims to Medicare for home health services purportedly provided to Medicare beneficiaries. According to court documents, Alliance employees, including the owners, falsified Medicare documentation and skilled nursing notes indicating that the patients were homebound and eligible for home health care services. In fact, the majority of Alliance patients were not eligible for the services because they were not homebound. According to court documents, Alliance employees and owners falsified time sheets and patient visit logs for services that were not adequately rendered or were never provided at all. Alliance then billed Medicare as if the services were adequately provided.
According to court documents, Alliance owners conspired with Futrell to recruit Medicare patients for the company so Alliance could increase its Medicare billing and revenue. Futrell was paid cash by Alliance owners. She agreed to pay patients kickbacks so that they would continue to use Alliance. Often, Futrell paid patients $100 per month to continue to receive home health care from Alliance. Alliance owners knew about, and at times facilitated, these kickbacks.
Each defendant faces a maximum sentence of 10 years in prison, a $250,000 fine and restitution. Ernest and Edith Amadi are scheduled to be sentenced on April 19, 2012. George and Agatha Opurum are scheduled to be sentenced on April 5, 2012. Ollie Futrell is scheduled to be sentenced on April 26, 2012. All sentencings will be before Judge Boyle.
The guilty pleas were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Sarah R. Saldaña of the Northern District of Texas; Special Agent in Charge Robert E. Casey Jr. of the FBI’s Dallas Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG); and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).
The case is being prosecuted by Assistant U.S. Attorney Katherine E. Pfeifle of the Northern District of Texas and Trial Attorney Benjamin A. O’Neil of the Fraud Section in the Justice Department’s Criminal Division. The case was investigated by the FBI, HHS-OIG and the Texas Attorney General’s MFCU.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Members and Associates of Barrio Azteca Gang Plead Guilty and Are Sentenced in El Paso, Texas, for Roles in Racketeering Conspiracy and Related CrimesRead the Press Release
WASHINGTON – An associate of the Barrio Azteca (BA) gang was sentenced today for her participation in a money laundering conspiracy. Yesterday, a BA gang member pleaded guilty, and three additional gang members and associates were sentenced to prison for their respective roles in a racketeering and drug trafficking conspiracy.
The guilty plea and prison sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Assistant Director of the Criminal Investigative Division Kevin Perkins and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).
Desiree Gamboa Cardona, 30, of El Paso, was sentenced today before U.S. District Judge Kathleen Cardone to 12 months and one day in prison. Cardona, a BA associate, pleaded guilty on Aug. 2, 2011, to conspiracy to commit money laundering.
BA gang member Santiago Lucero, 38, aka “Sonny,” of El Paso, pleaded guilty yesterday before U.S. District Magistrate Judge Norbert J. Garney in the Western District of Texas, El Paso Division, to racketeering conspiracy. A sentencing date has not yet been set by the court. At sentencing, Lucerno faces a maximum penalty of life in prison.
Jesus Espino, 33, and Delia Cervantes, 44, aka “Guera,” both of El Paso, were sentenced yesterday by Judge Cardone to 30 years and 70 months in prison, respectively. Espino, a gang member, pleaded guilty on Sept. 22, 2011, to participating in a racketeering conspiracy and Cervantes, a gang associate, pleaded guilty on July 20, 2011, to conspiracy to possess with intent to distribute heroin and conspiracy to import heroin.
BA associate Lorenzo Espino, 41, aka “Lencho” and “Oso,” of El Paso, also was sentenced yesterday by Judge Cardone to 151 months in prison. Lorenzo Espino pleaded guilty on Sept. 22, 2011, for his role in the racketeering conspiracy.
According to court documents, the Barrio Azteca gang began in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants, soldiers and associates – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, members and associates of the BA have engaged in a host of criminal activity committed since Jan. 1, 2003, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. consulate employee.
The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to information presented in court, as a BA officer, Jesus Espino helped coordinate the distribution of marijuana, cocaine and heroin in the Western District of Texas and elsewhere. Lorenzo Espino assisted in the distribution of heroin while Cervantes distributed heroin and paid street tax to the BA for protection. Cardona helped distribute BA proceeds to members incarcerated in the state and federal prison systems.
Thirty-five members and associates of the BA gang, including Lucero and 14 others who have pleaded guilty, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Trial is set to begin April 6, 2012.
The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and the U.S. Attorney’s Office of the Western District of Texas - El Paso Division. The U.S. Attorney’s Office for the District of New Mexico provided significant assistance in this case, including Assistant U.S. Attorney Sarah Davenport. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.
The case was investigated by the FBI’s El Paso Field Office. Special assistance was provided by the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.
Louisiana Man Indicted for Corruptly Interfering with the IRS and Filing False Tax ReturnsRead the Press Release
WASHINGTON – An indictment was unsealed today charging Jack Ray Carr of Baton Rouge, La., with one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns, and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS), and Treasury Inspector General for Tax Administration (TIGTA) announced.
According to the indictment filed against him, Carr corruptly endeavored to obstruct and impede the tax laws by filing false documents and tax returns with the IRS and by attempting to intimidate IRS employees. The indictment also alleges that Carr made and subscribed to false federal income tax returns, IRS Forms 1040, for 2001, 2002, 2003 and 2005. In particular, the tax return Carr filed for 2005 falsely reported $112,142 of federal income tax withholdings based on fictitious IRS Forms 1099-OID (Original Issue Discount) attached to the Form 1040.
An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.
This case was investigated by IRS Criminal Investigation and TIGTA. It is being prosecuted by Trial Attorneys Matthew Mueller and Gregory Bailey of the Justice Department’s Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/ . Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.
Justice Department Will Not Challenge Worker Rights Consortium's Designated Suppliers Program for Collegiate ApparelRead the Press Release
WASHINGTON — The Department of Justice today announced that it will not challenge a proposal by the Worker Rights Consortium to implement the Designated Suppliers Program. According to the Worker Rights Consortium, the Designated Suppliers Program is designed to enable colleges and universities to ensure that apparel with their school names and insignia is made in factories that provide fair labor conditions for their employees, including paying their employees a living wage.
The department’s position was stated in a business review letter to counsel for the Worker Rights Consortium from Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
The Worker Rights Consortium is a nonprofit corporation that was formed to improve working conditions and labor standards. According to the proposal by the Worker Rights Consortium, the Designated Suppliers Program will establish the proposed licensing terms that will require licensees and any factory that manufactures collegiate apparel to adhere to specified fair labor standards. The terms will include a requirement that licensees pay the factories with which they contract a sufficient amount that the factories can pay their employees a living wage, and that the licensees ensure that the factories guarantee workers the freedom to engage in collective bargaining.
In issuing the letter, Acting Assistant Attorney General Pozen stated that, “The Designated Suppliers Program can be viewed as procompetitive in that it may facilitate competition in a new area, by providing assurances that apparel was produced under conditions meeting the Designated Suppliers Program standard.”
Based on the representations made by the Worker Rights Consortium, the department said that the proposal is unlikely to lessen competition in the collegiate apparel sector. Incorporation of the proposed licensing terms is optional and up to each school and licensee, and is unlikely to have a substantial effect on licensing competition among potentially participating schools. The department said that it also is unlikely to have a substantial effect on downstream competition for apparel sales. Moreover, the factories affected by the proposed licensing terms are likely to constitute only a tiny portion of the labor market, making significant anticompetitive effects in that market unlikely.
Under the department’s business review procedure, a person or organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves its right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Division’s Antitrust Documents Group, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the Business Review Procedure.
Justice Department Releases Investigative Findings on the Seattle Police DepartmentRead the Press Release
WASHINGTON– Following a comprehensive investigation, the Justice Department today announced its findings that the Seattle Police Department (SPD) has engaged in a pattern or practice of excessive force that violates the Constitution and federal law. A letter detailing the findings was delivered to Seattle Mayor Michael McGinn and Police Chief John Diaz.
The investigation, launched on March 31, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Western District of Washington, focused on whether SPD engages in unconstitutional or unlawful policing through either (1) the use of excessive force or (2) discriminatory policing. The Justice Department found reasonable cause to believe that SPD engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994. The Justice Department does not make a finding that SPD engages in a pattern or practice of discriminatory policing, but the investigation raised serious concerns that some of SPD’s policies and practices, particularly those related to pedestrian encounters, could result in unlawful discriminatory policing. These practices undermine SPD’s ability to build trust among segments of Seattle’s diverse communities.
The Justice Department’s investigation involved an in-depth review of SPD documents, as well as extensive community engagement. The department reviewed thousands of pages of documents, including written policies and procedures, training materials, and internal reports, data, video footage and investigative files. Justice Department attorneys and investigators also conducted interviews with SPD officers, supervisors and command staff, and city officials; and conducted hundreds of interviews with community members and local advocates.
Throughout the investigation, the Justice Department provided feedback and technical assistance to SPD, and in response, SPD has already begun to implement a number of remedial measures. To create lasting reform, SPD must continue to develop and implement new force policies and protocols, and to train its officers on how to conduct effective and constitutional policing. In addition, SPD must implement systems that ensure accountability, foster police-community partnerships, and eliminate unlawful bias.
“Our investigation has revealed that inadequate systems of supervision and oversight have permitted systemic use of force violations to persist at the Seattle Police Department,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Our findings should serve as a foundation to reform the police department and to help restore the community’s confidence in fair, just and effective law enforcement. The problems within SPD have been present for many years and will take time to fix, but we look forward to continuing our positive partnership with the people of Seattle, Mayor Michael McGinn, Police Chief John Diaz, and his officers to create and implement a comprehensive blueprint for sustainable reform.”
“The solution to the problems identified within the Seattle Police Department will require strong and consistent leadership along the chain of command, effective training and policies, and vigilant oversight,” said Jenny A. Durkan, U.S. Attorney for the Western District of Washington. “This investigation and its findings provide a clear path forward. Ongoing efforts by the city and department to address these findings will not only ensure that obligations under the Constitution are met, but will improve public confidence in the department and enhance its ability to serve the people of Seattle.”
Based on a randomized, stratified and statistically valid sample of SPD’s use of force reports from Jan. 1, 2009, to April 4, 2011, factual findings include:
- When SPD officers use force, they do so in an unconstitutional manner nearly 20 percent of the time;
- SPD officers too quickly resort to the use of impact weapons, such as batons and flashlights. When SPD officers use batons, 57 percent of the time it is either unnecessary or excessive;
- SPD officers escalate situations, and use unnecessary or excessive force, when arresting individuals for minor offenses. This trend is pronounced in encounters with persons with mental illnesses or those under the influence of alcohol or drugs. This is problematic because SPD estimates that 70 percent of use of force encounters involve these populations.
The Justice Department also found that a number of long-standing and entrenched deficiencies have caused or contributed to these patterns or practices of unlawful or troubling conduct, including the following:
- Deficiencies in oversight, policies and training with regard to when and how to (1) use force, (2) report uses of force and (3) use many impact weapons (such as batons and flashlights);
- Failure of supervisors to provide oversight of the use of force by individual officers, including appropriate investigation and review of uses of force (notably, among the approximately 1,230 use of force reports from January 2009 to April 2011, only five were referred for “further review” at any level within SPD);
- Ineffective systems of complaint investigation and adjudication;
- An ineffective early intervention system and disciplinary system;
- Inadequate policies and training with regard to pedestrian stops and biased policing; and
- A failure to collect adequate data to assess biased policing allegations.
Resolution of these findings will require a written, court-enforceable agreement that sets forth remedial measures to be taken within a fixed period of time.
This investigation was conducted jointly by the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the Western District of Washington, with the assistance of law enforcement professionals, including former police chiefs.
The findings letter can be found at www.justice.gov/crt/about/spl/seattlepd.php . For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt . If you have any comments or concerns, please feel free to contact us at [email protected] .
Iraqi National Pleads Guilty to 23-Count Terrorism Indictment in KentuckyRead the Press Release
BOWLING GREEN, KY -- Iraqi citizen Waad Ramadan Alwan pleaded guilty to federal terrorism charges today in U.S. District Court before Senior Judge Thomas B. Russell, announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Elizabeth A. Fries, Special Agent in Charge of the FBI Louisville Division.
Alwan, 30, a former resident of Iraq, pleaded guilty to all counts of a 23-count indictment charging him with conspiracy to kill U.S. nationals abroad; conspiracy to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of improvised explosive devices (IEDs); attempting to provide material support to terrorists and to al-Qaeda in Iraq; as well as conspiracy to transfer, possess and export Stinger missiles. Alwan was indicted by a federal grand jury in Bowling Green, Ky., on May 26, 2011.
Alwan faces a maximum sentence of life in prison under the sentencing guidelines and a mandatory minimum of 25 years in prison. His sentencing is scheduled for April 3, 2012, at noon in federal court in Bowling Green before Judge Russell.
Alwan’s co-defendant, Mohanad Shareef Hammadi, 24, is charged in the same indictment with attempting to provide material support to terrorists and to al-Qaeda in Iraq, as well as conspiracy to transfer, possess and export Stinger missiles. Hammadi has entered a plea of not guilty to all charges and is presumed innocent unless and until proven guilty. A trial date for him has not been scheduled. Hammadi and Alwan were first arrested on criminal complaints on May 25, 2011.
“The successful investigation, arrest, interrogation and prosecution of Mr. Alwan demonstrates the effectiveness of our intelligence and law enforcement authorities in bringing terrorists to justice and preventing them from harming the American people,” said Assistant Attorney General Monaco. “I applaud all the dedicated professionals in the law enforcement and intelligence communities who are responsible for this successful outcome.”
According to the plea agreement and other court documents filed in this case, from about 2003 through 2006, Alwan knowingly conspired to kill U.S. nationals in Iraq. During this period, Alwan was in Iraq where he conspired with others to plant and detonate numerous IEDs against U.S. troops in Iraq. For instance, Alwan admitted that he and his co-conspirators planted an IED in a road near the Salah ad Din province in Iraq in an attempt to kill U.S. troops that traveled on this particular road. In addition, the FBI found two latent fingerprints belonging to Alwan on a component of a separate IED that was recovered by U.S. forces in Iraq in 2005.
Alwan also admitted today that from about October 2010 through May 2011, he knowingly taught and demonstrated to another individual in Kentucky how to manufacture and use an IED. Specifically, Alwan drew diagrams of different types of IEDs and also provided detailed oral instructions on how to manufacture and use those IEDs. He provided these diagrams with the intent that they be used to train others in the construction and use of such IEDs for the purpose of killing U.S. nationals overseas, including officers and employees of the United States.
In addition, Alwan admitted that from about September 2010 through May 2011, while in Kentucky, he knowingly attempted to provide material support and resources to terrorists and to al-Qaeda in Iraq, including money, weapons, and expert advice and assistance. On multiple occasions, for example, Alwan transferred money believing it would be provided to al-Qaeda in Iraq for the purpose of murdering U.S. employees or U.S. nationals overseas. In addition, he also transferred Stinger surface-to-air missile launcher systems, rocket-propelled grenade launchers, C4 plastic explosives, grenades, machine guns and sniper rifles, believing these items would be provided to al-Qaeda in Iraq for the purpose of murdering of U.S. employees or U.S. nationals overseas.
Finally, Alwan admitted that on March 16, 2011, while in Kentucky, he conspired with another individual to transfer, receive, possess and export two Stinger surface-to-air missile launcher systems.
Neither the bomb-making instructions, nor the Stinger missiles nor the other weapons or money transferred by Alwan while in Kentucky were actually provided to al-Qaeda in Iraq, but instead were carefully controlled by law enforcement as part of an undercover operation.
“Today in open court, Waad Alwan admitted to engaging in terrorist activities both here in the United States and in Iraq. He acknowledged he had built and placed numerous improvised explosive devices (IEDs) aimed at killing and injuring American soldiers in Iraq, and he admitted that he tried to send numerous weapons from Kentucky to Iraq to be used against American soldiers,” said U.S. Attorney Hale. “Bringing Alwan to justice is the result of a comprehensive effort by many in our law enforcement and intelligence communities. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky and our many other partners are to be commended. Their collaborative effort successfully thwarted the ongoing intentions of an experienced terrorist. The guilty plea today sends a strong message to anyone who would attempt similar crimes that they will face the same determined law enforcement and prosecution efforts.”
This case is being investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services and the Bowling Green Police Department.
This prosecution is being handled by Assistant U.S. Attorneys Mike Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.
Department of Justice Files Lawsuit Alleging Employment Discrimination by Florida Home Health Care CompanyRead the Press Release
WASHINGTON – The Justice Department filed a motion to intervene in a lawsuit yesterday against Home Care Giver Services Inc., a Florida corporation that provides home health aides, certified nursing assistants, licensed practical nurses and registered nurses to customers who seek home-based care givers. The Justice Department’s complaint alleges that the company discriminated against a U.S. citizen when it terminated her based on her national origin. The Immigration and Nationality Act’s (INA) anti-discrimination provision prohibits employers from discriminating against workers based on national origin or citizenship status in the hiring or firing process.
The charging party — a Colombian native — has been a U.S. citizen since she moved to Florida in 1978. Fluent in English, she began working for Home Care Giver Services Inc. in November 2010. According to the department’s findings, the company subjected her to insults and derogatory statements about her accent and Hispanic heritage and eventually terminated her in January 2011 because of her national origin.
“Discriminating against an employee based on his or her ancestry is completely contrary to the values and laws of our nation,” said Thomas E. Perez, Assistant Attorney General in charge of the Civil Rights Division. “The Justice Department is committed to vigorously enforcing the anti-discrimination provisions of the INA, including those protecting employees from discrimination based on their national origin.”
The charging party filed a lawsuit with the Office of the Chief Administrative Hearing Officer (OCAHO) within the Executive Office for Immigration Review on Sept. 14, 2011. Because the charging party has already filed a complaint, the Justice Department seeks to intervene in the existing lawsuit. The Justice Department’s lawsuit is being prosecuted by Phil Telfeyan and Byron Wong, trial attorneys.
The Office of Special Counsel (OSC) for Immigration Related Unfair Employment Practices is responsible for enforcing the anti-discrimination provision of the INA, which protects work authorized individuals from employment discrimination on the basis of citizenship status or national origin discrimination, including discrimination in hiring and the employment eligibility verification (Form I-9) process. OSC has jurisdiction over national origin discrimination cases involving employers employing four to 14 employees. The Equal Employment Opportunity Commission has jurisdiction over national origin discrimination cases involving larger employers. For more information about protections against employment discrimination under the immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired), 1-800-255-8255 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired), or 202-616-5594; email [email protected] ; or visit OSC’s website at www.justice.gov/crt/osc.
CEO of Comcast Brian Roberts to Pay $500,000 Civil Penalty for Violating Antitrust Premerger Notification RequirementsRead the Press Release
WASHINGTON – Comcast Corporation’s CEO Brian L. Roberts will pay a $500,000 civil penalty to settle charges that he violated premerger reporting and waiting requirements when he acquired Comcast voting securities, the Department of Justice announced today.
The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Roberts for violating the notification requirements of the Hart-Scott-Rodino (HSR) Act of 1976. At the same time, the department filed a proposed settlement that, if approved by the court, will settle the charges.
Roberts is also chairman of the board of Comcast, a leading provider of cable television services headquartered in Philadelphia.
According to the complaint, Roberts failed to comply with the antitrust premerger notification requirements of the HSR Act before acquiring voting securities of Comcast as part of his compensation as chairman and chief executive officer of Comcast beginning on Oct. 22, 2007, which resulted in his holding more than $119.6 million of Comcast stock. On Aug. 25, 2009, Roberts made a corrective filing for Comcast voting securities he had acquired. Although this is the first time Roberts has been charged with an HSR Act violation, previously he had twice made corrective filings regarding transactions that he acknowledged were reportable under the HSR Act, asserting that the failures to file and observe the waiting period were inadvertent.
The Hart-Scott-Rodino Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements on individuals and companies over a certain size before they consummate acquisitions resulting in holding stock or assets above a certain value, which was $59.8 million in 2007 and is currently $66 million.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice. For a party in violation of the HSR Act before Feb. 10, 2009, the maximum civil penalty is $11,000 a day for each day it is in violation of the Act. For a party in violation of the HSR Act on or after Feb. 10, 2009, the maximum penalty is $16,000 a day.
15 December 2011
Three Pittsburgh Crips Members Sentenced to Prison on Racketeering ChargesRead the Press Release
WASHINGTON – Dominique Steele, Nicky Evans and Jamar Pharr, of Pittsburgh, were sentenced this week in federal court on charges of conspiring to conduct a racketeering enterprise, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney David J. Hickton of the Western District of Pennsylvania.
Jamar Pharr, 27, aka “Brownway,” was sentenced today by Senior U.S. District Judge Gustave Diamond to 10 years in prison. Pharr pleaded guilty on Aug. 18, 2011, to one count of conspiracy to engage in a racketeering enterprise.
Dominique Steele, 21, aka “C-Flack,” was sentenced yesterday to 15 years in prison by Judge Diamond. Steele pleaded guilty on Aug. 25, 2011, to one count of conspiracy to engage in a racketeering enterprise and one count of discharging a firearm in furtherance of a crime of violence.
Nicky Evans, 31, aka “Yamma,” was sentenced yesterday to 88 months in prison. Evans pleaded guilty on Aug. 23, 2011, to one count of conspiracy to engage in a racketeering enterprise.
According to the guilty pleas, Steele, Pharr, Evans and others participated in a pattern of racketeering activity that included robberies at gun point; attempted murders; distribution of cocaine, heroin and crack cocaine; and obstruction of justice and witness intimidation.
According to court documents, Pharr and Steele were members of the Northview Heights/ Fineview Crips, while Evans was a member of the Brighton Place Crips. The Brighton Place Crips were a criminal street gang that controlled an area of Brighton Place and Morrison Street, also known as the Mad Cave, and Federal Street in the Northside area of Pittsburgh. The Brighton Place Crips were formed in the early 1990s; in 2003, it formed an alliance with the Northview Heights/ Fineview Crips. This alliance expanded the gang’s drug trafficking territory, and increased the number of gang members and associates available to preserve and protect the gang’s power, territory and profits through violence.
The Brighton Place/Northview Heights Crips gang maintains exclusive control over drug trafficking in these neighborhoods through continuous violence and intimidation of rivals and witnesses. Members of the gang support each other through payment of attorneys’ fees and bonds, as well as payments to jail commissary accounts and support payments to incarcerated members’ families.
In addition, gang members had violent confrontations with members of the rival Manchester OG’s and other street gangs operating in the Northside Section of Pittsburgh. Members and associates obtained greater authority and prestige within the enterprise based on their reputation for violence and their ability to obtain and sell a steady supply of illegal drugs. According to court documents, the Brighton Place/Northview Heights Crips gang members identify themselves by wearing blue, flashing Crips gang hand signals, and using phrases such as “Cuz,” “C-Safe,” “Loc” and “G.K.”
Steele, Evans and Pharr are three of the 26 defendants charged in February 2010 with being members or associates of the Brighton Place/Northview Heights Crips, a racketeering enterprise. This prosecution resulted from a Project Safe Neighborhoods Task Force investigation that began in 2005. To date, all members or associates of the Brighton Place/ Northview Heights Crips who were charged in this indictment have pleaded guilty to racketeering charges.
This case is being prosecuted by Assistant U.S. Attorneys Charles A. Eberle and Troy Rive tti of the Western District of Pennsylvania and Trial Attorney Kevin Rosenberg of the Criminal Division’s Organized Crime and Gang Section. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the City of Pittsburgh Bureau of Police; the Allegheny County, Penn., Police Department; and the Allegheny County Sheriff’s Office.
Texas Oil Company Sentenced to Pay $12 Million for Clean Air Act and Obstruction Crimes in LouisianaRead the Press Release
WASHINGTON – Pelican Refining Company LLC, was sentenced today to pay $12 million for felony violations of the Clean Air Act and obstruction of justice charges in federal court in Lafayette, La., announced Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana, Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division of the Department of Justice, and Cynthia Giles, Assistant Administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance.
“This corporation operated without even the most basic requirements of an environmental compliance plan and endangered the public and its own employees by implementing unsafe practices in violation of its permit and reporting requirements,” said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice. “Today's plea demonstrates that the Justice Department will continue to vigorously prosecute those who violate environmental and workplace safety laws.”
“This conviction sends a message to all those who threaten Louisiana’s precious environment that if they ignore their duty to adhere to the environmental laws, they will be investigated, prosecuted, fined and sentenced accordingly,” said U.S. Attorney Finley. “My office takes these violations very seriously, and we will continue to aggressively prosecute these types of cases. I particularly want to thank EPA, the Louisiana Department of Environmental Quality and the state police for helping to bring these serious crimes to light and assisting in the investigation and prosecution of Pelican and the responsible individuals.”
“Facilities have a responsibility to protect their employees and local residents by following our nation’s environmental laws,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Corporations that choose to cut corners and ignore these critical safeguards will face significant consequences.”
Pelican was sentenced today by U.S. District Court Judge Richard T. Haik Sr. to pay a $12 million penalty, which includes a $10 million criminal fine and $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. The criminal fine is the largest ever in Louisiana for violations of the Clean Air Act. Pelican is also prohibited from future operations unless it implements an environmental compliance plan, which includes independent quarterly audits by an outside firm and oversight by a court appointed monitor.
In a joint factual statement filed in court, Pelican, headquartered in Houston, admitted that the company had knowingly committed criminal violations of its operating permit at the refinery located in Lake Charles, La. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the EPA, which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.
Pelican admitted to the following:
- Pelican had no company budget, no environmental department and no environmental manager;
- In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated;
- It was a routine practice for over a year to use an emergency flare gun to re-light the flare tower at the refinery designed to burn off toxic gases and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses;
- Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;
- A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed;
- A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly; and
- Pelican provided false information to the states of Louisiana and Texas concerning the laboratory testing of asphalt.
Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston pleaded guilty on July 6, 2011, to the crime of negligently placing persons in imminent danger of death and serious bodily injury in violation of the Clean Air Act as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts. On Oct. 31, 2011, Pelican’s former asphalt facilities manager, Mike LeBleu, also pleaded guilty to a negligent endangerment charge under the Clean Air Act.
The government’s investigation of the Pelican Refinery continues. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to visit www.justice.gov/usao/law/vicwit/index.html to learn more about the case and the Crime Victims’ Rights Act or you may contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana.The criminal investigation is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Finley, Senior Trial Attorney Richard A. Udell and Trial Attorney Christopher Hale of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice.
Photos: www.epa.gov/compliance/criminal/investigations/pelican-exhibits.pdf.
The Joint Factual Statement: www.epa.gov/compliance/criminal/investigations/pelican-jfs-10-21-11.pdf.
More information on EPA’s criminal enforcement program: www.epa.gov/compliance/criminal/index.html.
Maryland Business Owner Pleads Guilty for Failing to Pay Employment TaxesRead the Press Release
WASHINGTON – Richard Stewart, a resident of Mitchellville, Md., pleaded guilty today for failing to pay over employment taxes in connection with his ownership of Montgomery Mechanical Services, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement and criminal information, from at least 2003 through 2008, Stewart owned and operated Montgomery Mechanical Services, a company that installed plumbing, heating and air conditioning in commercial buildings and that had offices in Baltimore and Capitol Heights, Md. From 2003 through at least 2008, Stewart did not collect, truthfully account for and pay over approximately $3,969,337 of Federal Insurance Contribution Act (FICA) taxes and federal income tax withholdings, commonly known as trust fund taxes, from his employees’ wages. According to the terms of the plea agreement, Stewart is required to pay restitution to the IRS in the amount of $5,414,647, which encompasses both the trust fund taxes that he failed to pay and his obligation, as an employer, to pay over a matching portion of FICA taxes.
Stewart faces a potential maximum sentence of five years in prison and a fine of up to $250,000.
The case was investigated by IRS-Criminal Investigation. Trial Attorneys Tino M. Lisella and Jeffrey L. Shih of the Justice Department’s Tax Division handled the prosecution.
Sentencing is tentatively scheduled for April 23, 2012 before the Honorable Roger W. Titus in Greenbelt, Md.
Former America’s Most Wanted Fugitive Sentenced in Virginia to 105 Years in Prison for Leading International Conspiracy to Defraud the MilitaryRead the Press Release
WASHINGTON – Roger Charles Day Jr., a former America’s Most Wanted fugitive, was sentenced today to 105 years in prison for his role in leading an international conspiracy to defraud the Department of Defense (DOD) of more than $11.2 million by supplying nonconforming and defective parts for military aircraft, vehicles and weapons systems.
The sentence was announced today by U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office; and Special Agent in Charge Edward T. Bradley of the DCIS Northeast Field Office.
Day, 47, formerly of Long Valley, N.J., was also ordered by U.S. District Judge John Gibney to forfeit 3,496 ounces of gold bars and coins, two sport utility vehicles and $2.1 million, which together represents his proceeds from the scheme. In addition, Judge Gibney ordered Day to pay a $3 million punitive fine and $6.2 million in restitution to the Defense Logistics Agency (DLA), the DOD entity that Day defrauded.
On Aug. 25, 2011, Day was found guilty on all counts, following a nine-day jury trial. Day was charged in August 2008 with conspiracy to commit wire fraud, wire fraud, conspiracy to engage in international money laundering and conspiracy to smuggle gold out of the United States. Day was extradited from Mexico in December 2010 following his arrest in Cancun, Mexico, resulting from a story which aired on America’s Most Wanted pertaining to Day.
“Mr. Day’s greed put the men and women in the U.S. military in harm’s way,” said U.S. Attorney MacBride. “He is a serial fraudster who made millions by exploiting the military supply chain during a time of armed conflict. Today’s sentence ensures that he will never again put our military in danger again.”
“Mr. Day orchestrated a complex, multi-year fraud scheme that jeopardized the safety of our nation’s military personnel,” said Assistant Attorney General Breuer. “He operated this scheme from outside the United States, in an attempt to escape justice, and he deliberately provided defective equipment to the Department of Defense. Today’s lengthy prison sentence reflects the seriousness of Mr. Day’s reckless crimes.”
“The sentencing of Roger Day to 105 years in prison culminates a highly successful investigation and represents an unprecedented sentence for a product substitution investigation by the Defense Criminal Investigative Service with audit support by the Defense Contract Audit Agency. Through his many schemes to defraud the Department of Defense, Day exploited the Department’s complex acquisition process,” said DCIS Special Agents in Charge Bradley and Craig in a joint statement. “It is unpardonable that individuals endeavor to enrich themselves by stealing from the U.S. taxpayer through fraud, especially by denying critical goods to our warfighters combating terrorism in a hostile overseas environment. The Defense Criminal Investigative Service remains resolute in our commitment to aggressively investigate these crimes and to support their prosecution to the fullest.”
According to the evidence at trial and court documents, over a four-year period, Day led a conspiracy to bid on and win contracts to provide parts to the U.S. military for military aircraft, vehicles and weapons systems through the DLA, including through the DLA’s Defense Supply Center in Richmond, Va. The parts included “critical application items,” which are essential to weapons system performance or to the preservation of the lives and safety of operating personnel.
In the course of the scheme, Day and other conspirators, operating in the United States, Canada, Mexico and Belize, formed at least 18 separate companies that posed as legitimate contractors and collectively used a computer program to win nearly 1,000 lucrative contract awards for the various companies. Day and his conspirators then shipped defective parts to the DOD on more than 300 of those contracts, receiving more than $4.4 million in payment on parts that Day purchased for less than $200,000.
In all known cases, the parts sent by Day and his conspirators could not be used for their intended purpose. In one instance, a U.S. Air Force master sergeant at Patrick Air Force Base in Florida was unable to perform necessary testing of missile detection systems on HC-130 aircraft for a period of seven weeks because of a defective Day-supplied part. In another instance, technicians at Robins Air Force Base in Georgia who had requested a new part for the radar control panel of a C-130 aircraft received a bogus part supplied by Day and were required to instead take a used part from another aircraft to complete the necessary repair.
Day and his co-conspirators compounded the fraud by concealing their identities through the use of multiple nominee companies and by assuming others’ identities to operate the companies. When DOD requested proof that the companies had purchased and intended to supply the correct parts from approved manufacturers, Day and others submitted fabricated documents that falsely represented that the correct parts had been purchased. When DOD debarred several of the companies from doing further business with the military, Day directed his conspirators to discontinue bidding through those companies and instead form and use new companies.
According to evidence presented at trial, to conceal the proceeds of the scheme and to prevent recovery, Day directed his conspirators to transfer the scheme’s proceeds to offshore bank accounts and ultimately to purchase more than 3,500 ounces (more than $2.2 million) in gold bars and coins.
Before starting his most recent scheme, Day was sentenced in August 1999 in the District of New Jersey to 97 months in prison for a similar scheme to defraud the DOD and other government agencies, and Day was sentenced in October 1999 in New Jersey state court to 84 months in prison for schemes to defraud the city of Newark, N.J. and the Newark Board of Education. While serving his federal sentence, Day filed hundreds of billions of dollars of fraudulent default judgments against more than 100 people who Day claimed had prosecuted him unfairly, including the prior case’s investigating agents, the prosecuting attorneys, Day’s former defense counsel and the U.S. district judge who sentenced him in New Jersey.
Prior to Day’s trial, five defendants in this conspiracy pleaded guilty. Nathan Francis Victor Carroll was sentenced on Nov. 8, 2007, to 94 months in prison and was ordered to pay nearly $3.7 million in restitution. Gregory Allen Stewart was sentenced on April 29, 2008, to 75 months in prison and was ordered to pay nearly $3.7 million in restitution. Susan Crotty Neufeld was sentenced on May 14, 2008, to five years of probation and ordered to pay $47,600 in restitution for the gold coins she received. Juerg Mehr was sentenced to five years of probation on March 27, 2009. Glenn Teal was sentenced on Sept. 22, 2009, to 90 days in prison.
This case was investigated by the Defense Criminal Investigative Service, with assistance from the Defense Contract Audit Agency. The case was prosecuted by former Assistant U.S. Attorney John S. Davis and Assistant U.S. Attorney Elizabeth C. Wu of the Eastern District of Virginia and Special Assistant U.S. Attorney and Fraud Section Trial Attorney Ryan S. Faulconer of the Justice Department’s Criminal Division. The Criminal Division’s Office of International Affairs provided assistance.
Federal Court Bars Operator of New Jersey Tax Firm from Preparing Federal Tax ReturnsRead the Press Release
WASHINGTON - A federal court has permanently barred Carmen Gonzalez from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order, to which Gonzalez consented without admitting wrongdoing, was signed by Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey. According to the government complaint, Gonzalez, of Allentown, Pa., operates Carmen Tax Services in New Brunswick, N.J.
The complaint alleged that Gonzalez repeatedly failed to comply with due-diligence requirements imposed by federal law on tax preparers who claim the earned income tax credit (EITC) on their customers’ returns. According to the complaint, Gonzalez also falsified deductions and listed bogus dependents on her customers’ returns in order to claim the maximum EITC for them.
The court order requires Gonzalez to send a letter to all customers for whom she prepared a federal tax return since Jan. 1, 2005, informing them that she has agreed to the injunction and is no longer permitted to prepare tax returns for others.
The Internal Revenue Service has listed return preparer fraud as one of its “Dirty Dozen ” tax scams for 2011. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax fraud promoters. Information about these cases is available on the Justice Department website .
El Departamento de Justicia Divulga Resultados de la Investigación de la Oficina del Alguacil del Condado de MaricopaRead the Press Release
WASHINGTON - Después de una investigación exhaustiva, el Departamento de Justicia anunció hoy sus conclusiones en la investigación de derechos civiles en curso sobre la Oficina del Alguacil del Condado de Maricopa [Maricopa County Sheriff’s Office (MCSO)]. El Departamento de Justicia encontró causa razonable para creer que la MCSO, bajo el liderazgo del Alguacil Joseph M. Arpaio, ha exhibido un patrón o práctica de conducta indebida que viola la Constitución y la ley federal. La investigación, abierta en junio de 2008, fue realizada de acuerdo con la Ley de Control de Delitos Violentos y Coacción Legal de 1994 y el Título VI de la Ley de Derechos Civiles de 1964, y las normas de implementación del Título VI.
 El Departamento de Justicia encontró causa razonable para creer que ocurrió un patrón o práctica de conducta inconstitucional y/o violaciones de la ley federal en varias áreas, entre las que se incluyen:
- Prácticas de acción policial discriminatorias, entre las que se incluyen paradas, detenciones y arrestos ilícitos de hispanos;
- Represalias ilegales contra personas que hacían ejercicio de su derecho de la Primera Enmienda de criticar las políticas o prácticas de la MCSO, incluidas, entre otras, prácticas relacionadas con el tratamiento discriminatorio dado a los hispanos; y
- Prácticas carcelarias discriminatorias contra presidiarios hispanos con conocimientos limitados del idioma inglés, al castigarlos y negarles servicios críticos.
El Departamento de Justicia encontró una serie de deficiencias sistémicas antiguas y enraizadas que provocaron o contribuyeron para estos patrones de conducta ilícita, incluidos:
- Ausencia de implementación de políticas que orientaran a los delegados respecto de prácticas policiales;
- Permitir que unidades especializadas utilizaran prácticas inconstitucionales;
- Capacitación inadecuada;
- Supervisión inadecuada;
- Un sistema disciplinario, de supervisión y de rendición de cuentas por actos propios ineficaces; y
- Falta de supervisión y responsabilización externas suficientes.
Además de estas conclusiones formales de patrones o prácticas, la investigación reveló áreas adicionales de gran preocupación, incluidas:
- Uso de fuerza excesiva;
- Prácticas policiales con el efecto de comprometer significativamente la capacidad de la MCSO de proteger adecuadamente a los residentes hispanos; y
- Falta de investigación adecuada de alegatos de agresiones sexuales.
Si bien no hubo hallazgos formales de violaciones de patrón o práctica en conexión con estos temas, la investigación continúa en curso.
“La indiferencia sistemática de la MCSO respecto de protecciones constitucionales básicas ha creado un muro de desconfianza entre la oficina del Alguacil y grandes segmentos de la comunidad, lo cual compromete significativamente la capacidad de la misma de proteger y servir al pueblo", dijo Thomas E. Perez, Secretario de Justicia Auxiliar de la División de Derechos Civiles. “Los problemas están profundamente enraizados en la cultura de la MCSO, y se ven agravados por la tendencia de a MCSO a las represalias contra las personas que dicen lo que piensan”.
La investigación exhaustiva e independiente del departamento consistió en un análisis profundo de las prácticas de la MCSO, así como la participación extensa de la comunidad. Abogados, investigadores y expertos del Departamento realizaron entrevistas con más de 400 personas, incluidos 75 supervisores y delegados actuales y anteriores de la MSCO, entre los que se incluyó el Alguacil Arpaio y 150 actuales y anteriores presidiarios de la MCSO. Además, el departamento analizó miles de páginas de documentos. Muchas de las entrevistas y gran parte de este análisis se demoró cuando la MCSO se negó a proveer los documentos y el acceso requeridos. Finalmente, la MCSO brindó el acceso y los documentos requeridos después de que el departamento entabló una demanda bajo el Título VI en septiembre de 2010.
Abordar los hallazgos de la investigación, y reformar la MCSO, requiere un compromiso sostenido para con un cambio estructural, cultural e institucional de largo plazo. La MCSO debe desarrollar e implementar nuevas políticas y procedimientos, y capacitar a sus agentes en servicios policiales eficaces y constitucionales. Además, la MCSO debe implementar sistemas para garantizar la responsabilización y eliminar la parcialidad ilícita de todos los niveles de la toma de decisiones asociadas a la aplicación de la ley.
El departamento buscará obtener un acuerdo con fuerza ejecutoria judicial e intentará trabajar con la MCSO y funcionarios del Condado de Maricopa en el desarrollo y la implementación de un plan de reforma integral con la supervisión judicial necesaria para corregir las violaciones de la Constitución y la ley federal. “La acción policial eficaz y la acción policial constitucional van de la mano.  El desarrollo y la implementación de reformas significativas ayudarán a reducir el delito, asegurando el respecto por la Constitución y garantizando que el pueblo del Condado de Maricopa confíe en el compromiso de la MSCO hacia hacer valer la ley de manera justa y efectiva", dijo Thomas E. Perez. “Esperamos resolver las inquietudes detalladas en nuestras conclusiones de manera conjunta; sin embargo, no hesitaremos en tomar la acción legal correspondiente si la MCSO elige una línea de acción diferente”.
Esta investigación fue conducida por la Sección de Litigios Especiales de la Sección de Coordinación y Cumplimiento Federales de la División de Derechos Civiles con la asistencia de profesionales de las fuerzas del orden público, incluidos ex jefes de la policía, un asesor en prácticas carcelarias y un asesor en análisis estadístico. Los miembros de la comunidad del Condado de Maricopa que deseen brindar información al Departamento para el avance de esta investigación pueden llamar al 1-877-613-2137 o enviar un mensaje de correo electrónico a [email protected].
Se puede encontrar el informe entero en http://www.justice.gov/crt/about/spl/mcso.php. Para obtener más información sobre la División de Derechos Civiles del Departamento de Justicia, visite www.justice.gov/crt.
NO RESPONDA ESTE MENSAJE. SI TIENE PREGUNTAS, POR FAVOR, UTILICE LOS CONTACTOS EN EL MENSAJE O LLAME A LA OFICINA DE ASUNTOS PÚBLICOS AL 202-514-2007.
Department of Justice Releases Investigative Findings on the Maricopa County Sheriff’s OfficeRead the Press Release
WASHINGTON– Following a comprehensive investigation, the Justice Department today announced its findings in the ongoing civil rights investigation of the Maricopa County Sheriff’s Office (MCSO). The Justice Department found reasonable cause to believe that MCSO, under the leadership of Sheriff Joseph M. Arpaio, has engaged in a pattern or practice of misconduct that violates the Constitution and federal law. The investigation, opened in June 2008, was conducted under the provisions of the Violent Crime Control and Law Enforcement Act of 1994 and Title VI of the Civil Rights Act of 1964, and the Title VI implementing regulations.
The department found reasonable cause to believe that a pattern or practice of unconstitutional conduct and/or violations of federal law occurred in several areas, including:
- Discriminatory policing practices including unlawful stops, detentions and arrests of Latinos;
- Unlawful retaliation against individuals exercising their First Amendment right to criticize MCSO’s policies or practices, including but not limited to practices relating to its discriminatory treatment of Latinos; and
- Discriminatory jail practices against Latino inmates with limited English proficiency by punishing them and denying them critical services.
The Justice Department found a number of long-standing and entrenched systemic deficiencies that caused or contributed to these patterns of unlawful conduct, including:
- A failure to implement policies guiding deputies on lawful policing practices;
- Allowing specialized units to engage in unconstitutional practices;
- Inadequate training;
- Inadequate supervision;
- An ineffective disciplinary, oversight and accountability system; and
- A lack of sufficient external oversight and accountability.
In addition to these formal pattern or practice findings, the investigation uncovered additional areas of serious concern, including:
- Use of excessive force;
- Police practices that have the effect of significantly compromising MCSO’s ability to adequately protect Latino residents; and
- Failure to adequately investigate allegations of sexual assaults.
While no formal findings of pattern or practice violations have been made in connection with these issues, the investigation remains ongoing.
“MCSO’s systematic disregard for basic constitutional protections has created a wall of distrust between the sheriff’s office and large segments of the community, which dramatically compromises the ability to protect and serve the people,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The problems are deeply rooted in MCSO’s culture, and are compounded by MCSO’s penchant for retaliation against individuals who speak out.”
The department’s thorough and independent investigation involved an in-depth review of MCSO practices, as well as extensive community engagement. Department attorneys, investigators and experts conducted interviews with more than 400 individuals including, 75 current and former MCSO supervisors and deputies, including Sheriff Arpaio, and 150 former and current MCSO inmates. In addition, the department reviewed thousands of pages of documents. Many of the interviews and much of this review was delayed when MCSO refused to provide required documents and access. MCSO finally provided the required access and documents after the department filed a lawsuit under Title VI in September 2010.
Addressing the findings, and reforming MCSO, requires a sustained commitment to long term structural, cultural and institutional change. MCSO must develop and implement new policies and procedures and train its officers in effective and constitutional policing. In addition, MCSO must implement systems to ensure accountability, and eliminate unlawful bias from all levels of law enforcement decision making.
The department will seek to obtain a court enforceable agreement and will attempt to work with MCSO and Maricopa County officials to develop and implement a comprehensive reform plan with the judicial oversight needed to address the violations of the Constitution and federal law.
“Effective policing and constitutional policing go hand in hand. Developing and implementing meaningful reforms will assist in reducing crime, ensuring respect for the Constitution, and ensuring that the people of Maricopa County have confidence in MCSO’s commitment to fair and effective law enforcement,” said Thomas E. Perez. “We hope to resolve the concerns outlined in our findings in a collaborative fashion, but we will not hesitate to take appropriate legal action if MCSO chooses a different course of action.”
This investigation was conducted by the Special Litigation Section and the Federal Coordination and Compliance Section of the Civil Rights Division with the assistance of law enforcement professionals, including former police chiefs, a jail practices consultant and a consultant on statistical analysis. Members of the Maricopa County community who may wish to provide information to the department in furtherance of this investigation may call 1-877-613-2137 or email [email protected] .
The full report can be found at www.justice.gov/crt/about/spl/mcso.php For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt
Court Enters Consent Decree Resolving Food, Drug & Cosmetic Act Allegations Against Idaho DairyRead the Press Release
WASHINGTON – The U.S. District Court for the District of Idaho has entered a consent decree against G&H Dairy LLC., Jesus M. Hurtado, Gilbert M. Hurtado and John J. Gomez to resolve allegations of violations of the Federal Food, Drug and Cosmetic Act, the Justice Department announced today. The government’s action results from a series of inspections by the Food and Drug Administration (FDA) of G&H Dairy’s farms from 2009 to 2011.
The defendants, who are primarily in the dairy business, also sell cows for slaughter as food. Dairy farmers are required to maintain systems to ensure that their use of animal drugs is safe and conforms with the law. Among other things, they are required to wait a certain period of time before they may release food-producing animals treated with drugs for slaughter. Failure to do so may result in excess drugs in the tissues of these animals, above safe limits. This may harm consumers by causing allergic reactions and by contributing to the spread of antibiotic-resistant bacteria.
Between June 2006 and October 2009, the U.S. Department of Agriculture’s Food Safety and Inspection Service identified seven incidents of excess drug residues in culled G&H dairy cows that were sold for slaughter. Following these reports, the FDA inspected the dairy farm and found that G&H had used animal drugs in ways that caused these excess tissue residues in animals sold for slaughter as food. The inspections also revealed that G&H failed to maintain complete records concerning the medication of its animals. FDA issued a warning letter to the farm concerning these violations in 2009. After negotiations with the government, G&H and its principals have agreed to resolve its civil liability through a consent decree.
Under the consent decree, the defendants’ medication practices must be confirmed by the FDA as compliant with the law before G&H may sell cows for slaughter. In addition, the defendants are required to create and maintain documentation to address the problems that the FDA discovered during its inspections.
“It’s important to the health and safety of the American people that our farms adequately monitor and record how they using medications with their food-producing livestock, because failure to do so puts people at risk,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Today’s consent decree requires G&H Dairy to establish procedures and keep documentation that will help ensure American consumers receive foods that are safe for themselves and their families.”
The matter was handled by Trial Attorneys Shannon Pedersen and David Sullivan of the Justice Department’s Consumer Protection Branch and Assistant Chief Counsel Julie Doam of the Office of the General Counsel, Food and Drug Administration.